CASTLE CONVERTIBLE FUND, INC.
1 WORLD TRADE CENTER, SUITE 9333,
NEW YORK, NEW YORK 10048
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS:
The 1999 Annual Meeting of Shareholders of Castle Convertible Fund, Inc.
(the "Fund") will be held in the offices of the Fund, 1 World Trade Center,
Suite 9333, New York, New York 10048, 93rd Floor, on December 7, 1999 at 12:30
P.M. for the following purposes:
1. To elect seven (7) Directors for the ensuing year.
2.To ratify or reject the selection of Arthur Andersen LLP as the
independent public accountants for the Fund for the fiscal year ending
October 31, 2000.
3.To consider and act upon such other matters as may properly come
before the meeting or any adjournments thereof.
Shareholders of record as of the close of business on October 22, 1999
will be entitled to vote at the meeting. The enclosed proxy is being solicited
on behalf of Management of the Fund.
IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY TO ALGER SHAREHOLDER SERVICES,
INC., 30 MONTGOMERY STREET, JERSEY CITY, NEW JERSEY 07302, IN THE POSTPAID
RETURN ENVELOPE ENCLOSED FOR YOUR USE.
By order of the Board of Directors
DAVID D. ALGER
PRESIDENT
Dated: October 25, 1999
New York, New York
<PAGE>
PROXY STATEMENT
FOR
THE 1999 ANNUAL MEETING OF SHAREHOLDERS
OF
CASTLE CONVERTIBLE FUND, INC.
TO BE HELD ON DECEMBER 7, 1999
INTRODUCTION
The accompanying Proxy is being solicited by the Management of Castle
Convertible Fund, Inc. (the "Fund") for use at the Annual Meeting of
Shareholders to be held at 12:30 P.M. on December 7, l999 and at any
adjournments thereof. All costs of solicitation, including printing and mailing
of this Proxy Statement and the accompanying Notice of Meeting and Proxy, the
reimbursement of brokerage firms and others for their expenses in forwarding
solicitation material to the beneficial owners of stock, and supplementary
solicitations to submit proxies, which may be made by mail, telephone, telegraph
and personal interviews by officers of the Fund, will be borne by the Fund. It
is anticipated that the cost of such supplementary solicitation, if any, will be
nominal.
If the enclosed Proxy is properly executed and returned in time to be
voted at the meeting, the full and fractional shares represented thereby (each
full share is entitled to one vote and each fractional share is entitled to
proportionate voting rights) will be voted in accordance with the instructions
marked thereon. Unless instructions to the contrary are marked thereon with
respect to Proposals 1 and 2, the Proxy will be voted FOR the proposals stated
in the accompanying Notice of Meeting. All proxies not voted, including broker
non-votes, will not be counted toward establishing a quorum. Shareholders should
note that while votes to ABSTAIN will count toward establishing a quorum,
passage of any proposal being considered at the meeting will occur only if a
sufficient number of votes are cast FOR the proposal. Accordingly, votes to
ABSTAIN and votes AGAINST will have the same effect in determining whether the
proposal is approved. On any motion for adjournment of the meeting, even if a
quorum is present, Management will vote all Proxies in its discretion pursuant
to Item 3 thereof. Any shareholder giving a Proxy has the right to attend the
meeting to vote his shares in person (thereby revoking any prior Proxy) and also
the right to revoke the Proxy at any time by written notice received by the Fund
prior to its exercise.
This Proxy Statement and accompanying Proxy are being mailed to
shareholders on or about October 25, 1999. The address of the principal
executive office of the Fund is 1 World Trade Center, Suite 9333, New York, New
York 10048.
<PAGE>
A COPY OF THE FUND'S MOST RECENT SEMI-ANNUAL AND ANNUAL REPORTS WILL BE
SENT TO YOU WITHOUT CHARGE UPON WRITTEN REQUEST TO THE FUND, 1 WORLD TRADE
CENTER, SUITE 9333, NEW YORK, NY 10048 OR BY CALLING 800-223-3810 TOLL-FREE.
INFORMATION REGARDING VOTING SECURITIES
The Fund has only one class of shares of which 2,236,003 shares were
issued and outstanding as of the close of business on October 22, 1999, the
record date for determining shareholders entitled to receive notice of, and to
vote at the meeting and all adjournments thereof. Each share is entitled to one
vote at the Annual Meeting.
The following table sets forth those persons known to the Fund to be
beneficial owners of more than 5% of the outstanding voting shares of the Fund
as of October 22, 1999.
<TABLE>
<CAPTION>
AMOUNT OF
TITLE OF NAME AND ADDRESS BENEFICIAL PERCENT OF
CLASS OF BENEFICIAL OWNERS OWNERSHIP CLASS
- ------------------- --------------------------------- ---------------- -----------
<S> <C> <C> <C>
Common Stock Alger Associates, Inc. 420,787 Shs.* 18.82%
1 World Trade Center, Suite 9333
New York City, NY 10048
Common Stock All Directors and 430,045 Shs.** 19.23%
Officers as a Group
</TABLE>
- ----------------------------
* Included in this figure are 71,884 shares owned by Fred Alger & Company,
Incorporated, and 361 shares owned by Alger Shareholder Services, Inc.,
wholly-owned subsidiaries of Alger Associates, Inc.
** Included in this figure are 423,487 shares beneficially owned by Fred M.
Alger III, 420,787 shares beneficially owned by David D. Alger, 1,441 shares
beneficially owned by Lester L. Colbert, Jr., 5,017 shares beneficially owned
by Arthur M. Dubow and 100 shares beneficially owned by Nathan E.
Saint-Amand, M.D. Included in the shares beneficially owned by Messrs. Alger
are the 420,787 shares listed in the table above as being held by Alger
Associates, Inc., which may be deemed to be beneficially owned by Fred M.
Alger III and David D. Alger by virtue of their control of Alger Associates,
Inc.
2
<PAGE>
PROPOSAL NO. 1: ELECTION OF DIRECTORS
Seven directors are to be elected at the meeting, to serve until the next
annual meeting of shareholders and until their successors are elected and
qualified. Each of the nominees is currently a Director of the Fund; each has
indicated an intention to serve if elected and has consented to be named in this
Proxy Statement.
One of the nominees, B. Joseph White, was elected a Director of the Fund
by the Board of Directors in February, 1999. John T. Sargent, a Director of the
Fund since 1986, resigned on September 9, 1999 for personal reasons and is not
standing for reelection.
Fred Alger Management, Inc. (the "Adviser") has served as the investment
adviser to the Fund since February 1974. The Adviser is a wholly-owned
subsidiary of Fred Alger & Company, Incorporated ("Alger"). Alger, which is a
wholly-owned subsidiary of Alger Associates, Inc. ("Alger Associates"), is a
securities broker-dealer and member firm of the New York Stock Exchange, Inc.
The principal place of business of the Adviser and Alger Associates is 1 World
Trade Center, Suite 9333, New York, New York 10048. The principal place of
business of Alger is 30 Montgomery Street, Jersey City, New Jersey 07302. Alger
Associates and the Adviser are New York corporations and Alger is a Delaware
corporation.
Mr. Fred M. Alger III owns approximately 42.65% of Alger Associates'
outstanding voting securities. Mr. David D. Alger owns approximately 20.05% of
Alger Associates' outstanding voting securities.
The following table provides certain information about the Directors of
the Fund, including age, position with the Fund, business experience and
ownership of shares of the Fund.
3
<PAGE>
<TABLE>
<CAPTION>
SHARES OF THE
FUND BENEFICIALLY
POSITION WITH OWNED DIRECTLY
NAME, AGE AND BUSINESS THE FUND AND OR INDIRECTLY, PERCENT
EXPERIENCE FOR THE PERIOD OF AS OF OF SHARES
LAST FIVE YEARS SERVICE OCTOBER 22, 1999 OUTSTANDING
- ------------------------------------------------------ --------------------- ------------------ ------------
<S> <C> <C> <C>
* Fred M. Alger III, 64 Director and 423,487 Shs.** 18.94%
Chairman of the Boards of Alger Associates, Chairman of
the Adviser, Alger, Alger Properties, Inc. the Board since
("Properties"), Alger Shareholder Services, Inc. 1974
("Services"), Alger Life Insurance Agency, Inc.
("Agency"), the Fund, The Alger Fund, The
Alger American Fund, The Alger Retirement
Fund, Spectra Fund, Fred Alger International
Advisory S.A. ("International"), The Alger
American Asset Growth Fund ("Asset Growth")
and Analysts Resources, Inc. ("ARI"). Formerly
Chairman of the Board and President of Spectra
Fund, Inc.; formerly also President of Alger
Associates, the Adviser, Alger, Properties, Services,
Agency, the Fund, The Alger Fund, The Alger
American Fund and The Alger Retirement Fund.
* David D. Alger, 55 Director since 1993 420,787 Shs.** 18.82%
President and Director of Alger Associates, the and President
Adviser, Alger, Properties, Services, Agency, since 1995
International and the Fund; President and Trustee
of The Alger Fund, The Alger American Fund,
The Alger Retirement Fund and Spectra Fund;
Executive Vice President and Director of ARI;
Director of Asset Growth. Formerly Executive
Vice President and Director of Alger Associates,
the Adviser, Alger, Properties, Services and
Agency; Vice President and Director of Spectra
Fund, Inc. and the Fund; Vice President and
Trustee of The Alger Fund, The Alger American
Fund and The Alger Retirement Fund.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
SHARES OF THE
FUND BENEFICIALLY
POSITION WITH OWNED DIRECTLY
NAME, AGE AND BUSINESS THE FUND AND OR INDIRECTLY, PERCENT
EXPERIENCE FOR THE PERIOD OF AS OF OF SHARES
LAST FIVE YEARS SERVICE OCTOBER 22, 1999 OUTSTANDING
- ------------------------------------------------------- --------------------- ------------------ ------------
<S> <C> <C> <C>
Lester L. Colbert, Jr., 65 Director since 1974 1,441 Shs. 0.06%
Private investor since 1988. Formerly Chairman
of the Board, President and Chief Executive
Officer of Xidex Corporation.
Arthur M. Dubow, 66 Director since 1974 5,017 Shs. 0.22%
Trustee of the Arthur Dubow Foundation;
Director of Coolidge Investment Corporation;
Trustee of The Alger Fund, The Alger American
Fund, The Alger Retirement Fund and Spectra
Fund; private investor since 1985. Formerly
Director of Spectra Fund, Inc.
Stephen E. O'Neil, 67 Director since 1973 0 Shs. 0%
Attorney; private investor since 1981; Director of
Nova Care, Inc. and Brown-Forman Corporation;
Trustee of The Alger Fund, The Alger American
Fund, The Alger Retirement Fund and Spectra
Fund. Formerly of Counsel to the law firm of
Kohler & Barnes; formerly President and Vice
Chairman of City Investing Company; formerly
Director of Centerre Bancorporation, Spectra
Fund, Inc. and Syntro Corporation.
Nathan E. Saint-Amand, M.D., 61 Director since 1986 100 Shs. 0%
Medical doctor in private practice; Trustee of The
Alger Fund, The Alger American Fund, The Alger
Retirement Fund and Spectra Fund. Formerly
Director of Spectra Fund, Inc.
5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SHARES OF THE
FUND BENEFICIALLY
POSITION WITH OWNED DIRECTLY
NAME, AGE AND BUSINESS THE FUND AND OR INDIRECTLY, PERCENT
EXPERIENCE FOR THE PERIOD OF AS OF OF SHARES
LAST FIVE YEARS SERVICE OCTOBER 22, 1999 OUTSTANDING
- ------------------------------------------------------- --------------------- ------------------ ------------
<S> <C> <C> <C>
B. Joseph White, 52 Director since 0 Shs. 0%
Dean, University of Michigan Business School; February 1999
President, William Davidson Institute at the
University of Michigan Business School; Professor
of Business Administration, University of
Michigan Business School; Director, Gordon Food
Service; Trustee and Chair, Audit Committee,
Equity Residential Properties Trust; Director and
Chair, Compensation Committee, Kelly Services,
Inc.
- ----------------------------
* Fred M. Alger III and David D. Alger may be considered "interested persons" of
the Fund as such term is defined in the Investment Company Act of 1940 because
they are "interested persons" of the Adviser and officers of the Fund. Fred M.
Alger III and David D. Alger are brothers.
**Includes 420,787 shares of the Fund beneficially owned by Alger Associates,
Inc. directly or through wholly-owned subsidiaries. Fred M. Alger III and
David D. Alger may be deemed beneficially to own such shares by virtue of
their control of Alger Associates, Inc.
</TABLE>
6
<PAGE>
OFFICERS, DIRECTORS AND RELATED MATTERS
No director, officer or employee of the Adviser or its affiliates will
receive any compensation from the Fund for serving as an officer or Director of
the Fund. Each Director of the Fund who is not an "interested person" of the
Fund, as defined in the Investment Company Act of 1940, receives from the Fund a
fee of $2,000 for each meeting he attends, to a maximum of $8,000. During the
fiscal year ended October 31, l998, all such Directors who are nominees received
an aggregate of $32,000 of such fees. The Fund has no bonus, profit sharing,
pension or retirement plans. The following table provides compensation amounts
paid to nominees who are not interested persons of the Fund and who were
Directors during the fiscal year ended October 31, 1998.
COMPENSATION TABLE
<TABLE>
<CAPTION>
TOTAL COMPENSATION PAID TO DIRECTORS FROM
THE ALGER RETIREMENT FUND,
AGGREGATE THE ALGER FUND,
COMPENSATION THE ALGER AMERICAN FUND,
FROM CASTLE CONVERTIBLE FUND, INC. AND
NAME OF DIRECTOR CASTLE CONVERTIBLE FUND, INC. SPECTRA FUND.
- ------------------------ ------------------------------- ------------------------------------------
<S> <C> <C>
Lester L. Colbert, Jr. $8,000 $ 8,000
Arthur M. Dubow $8,000 $28,250
Stephen E. O'Neil $8,000 $28,250
Nathan E. Saint-Amand, M.D. $8,000 $28,250
</TABLE>
Four regular meetings of the Board of Directors were held during the
fiscal year ended October 31, 1998. During that period, with the exception of
Fred M. Alger III, each of the Directors attended at least 75% of the meetings
of the Board.
The Fund's Audit Committee, which oversees the Fund's accounting and
financial reporting policies and the independent audit of its financial
statements, consists of the following independent Directors: Mr. White, Mr.
Dubow and Mr. O'Neil. The Committee met once during the fiscal year ended
October 31, 1998. The Fund's Board of Directors has no nominating or
compensation committee or any committee performing similar functions.
7
<PAGE>
The following table provides certain information about the officers of
the Fund other than Fred M. Alger III and David D. Alger, both of whom are
listed above in the table of Directors. Officers are elected annually.
<TABLE>
<CAPTION>
POSITION WITH
NAME, AGE AND BUSINESS THE FUND AND
EXPERIENCE FOR THE PERIOD OF
LAST FIVE YEARS SERVICE
- ------------------------------------------------------- ----------------
<S> <C>
Gregory S. Duch, 48 Treasurer since
Executive Vice President, Treasurer and Director 1989
of Alger Associates, the Adviser and Properties;
Executive Vice President and Treasurer of Alger,
Services, Agency and ARI; Treasurer of the Fund,
The Alger Fund, The Alger American Fund, The
Alger Retirement Fund and Spectra Fund; Treasurer
and Director of International.
Mary Marsden-Cochran, 46 Secretary since
Since 1996, Vice President, General Counsel and 1996
Secretary of Alger Associates, the Adviser,
Alger, Properties, Services, Agency and ARI;
Secretary of the Fund, The Alger Fund, The Alger
American Fund, The Alger Retirement Fund,
International and Spectra Fund. Formerly
Associate General Counsel and Vice President of
Smith Barney, Inc.; formerly Blue Sky Attorney
for AMT Capital.
Frederick A. Blum, 44 Assistant Secretary and
Senior Vice President of Alger; Assistant Assistant Treasurer
Secretary and Assistant Treasurer of The Alger since 1997
Fund, The Alger American Fund, The Alger
Retirement Fund and Spectra Fund.
</TABLE>
Management recommends that shareholders vote FOR Proposal No. 1.
8
<PAGE>
PROPOSAL NO. 2: RATIFICATION OF THE SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, including a majority of the Directors who are not
"interested persons" of the Fund or the Adviser, have selected and approved
Arthur Andersen LLP as the independent public accountants to examine the
financial statements of the Fund for the fiscal year ending October 31, 2000.
The Fund has been advised that no member of such firm has a material direct or
indirect interest in the Fund. Pursuant to Section 32(a) of the Investment
Company Act of 1940, such selection is subject to ratification or rejection by
shareholders of the Fund. A representative of Arthur Andersen LLP is expected to
be present at the meeting to answer any questions which the Fund's shareholders
may have. The representative will have an opportunity to make a statement if he
or she so desires.
Management recommends that shareholders vote FOR Proposal No. 2.
LITIGATION
The Fund is not a party to any material litigation.
OTHER MATTERS
Management knows of no other matters to be brought before the meeting;
however, if any other matters come before the meeting, the persons named in the
enclosed Proxy will vote proxies that do not contain specific restrictions in
accordance with their best judgment on such matters.
SHAREHOLDERS' PROPOSALS
A shareholder proposal intended to be presented at the Fund's 2000 Annual
Meeting of Shareholders must be received by the Fund a reasonable time before
the solicitation is made in order to be included in the Fund's proxy statement
and form of proxy relating to that meeting.
1 World Trade Center, Suite 9333
New York, New York 10048
Dated: October 25, 1999
IF YOU CANNOT ATTEND THE MEETING, YOU ARE URGED TO FILL IN, SIGN AND
DATE THE ENCLOSED PROXY AND RETURN IT AS PROMPTLY AS POSSIBLE. AN ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
9
<PAGE>
CASTLE CONVERTIBLE FUND, INC.
PROXY
ANNUAL MEETING OF SHAREHOLDERS DECEMBER 7, 1999
The undersigned shareholder of Castle Convertible Fund, Inc. hereby appoints
David D. Alger, Gregory S. Duch and Stephen E. O'Neil, and each of them, the
attorneys and proxies of the undersigned, with power of substitution, to vote,
as indicated herein, all of the shares of common stock of Castle Convertible
Fund, Inc. standing in the name of the undersigned at the close of business on
October 22, 1999, at the Annual Meeting of Shareholders of the Fund to be held
at the offices of the Fund, 1 World Trade Center, Suite 9333, New York, New York
10048 at 12:30 P.M. on December 7, 1999, and at all adjournments thereof, with
all of the powers the undersigned would possess if then and there personally
present 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 of the meeting, and to vote and act on any other matter
which may properly come before the meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS GIVEN BY THE SHAREHOLDERS, BUT IF NO INSTRUCTIONS
ARE GIVEN IT WILL BE VOTED FOR THE PROPOSALS LISTED.
(Continued and to be signed on the reverse side)
<PAGE>
PLEASE MARK BOXES [=] OR [X] IN BLUE OR BLACK INK.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS FOR all nominees listed below (except WITHHOLD AUTHORITY to vote
as marked to the contrary below) - for all nominees listed below -
INSTRUCTIONS: To withhold authority to vote for any individual nominee strike a line through the nominee's name in the list
below.
Fred M. Alger III, David D. Alger, Lester L. Colbert, Jr., Arthur M. Dubow, Stephen E. O'Neil, Nathan E. Saint-Amand,
B. Joseph White
2.PROPOSAL TO RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP as independent public accountants of the Fund.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. PROPOSAL TO CONSIDER AND ACT UPON such other matters as may properly come before the meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY. Signature(s) should
be exactly as name or names appear on
this proxy. If stock is held jointly,
each holder should sign. If signing is by
attorney, executor, administrator,
trustee or guardian, please give full
title.
-----------------------------------------
Signature(s) Signature(s)
-----------------------------------------
Dated Social Security or Tax
Identification Number
THIS PROXY, WHEN DATED AND SIGNED, SHOULD
BE MAILED PROMPTLY TO ALGER SHAREHOLDER
SERVICES, INC., 30 MONTGOMERY STREET,
JERSEY CITY, NJ 07302. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES
IN THE ENCLOSED ENVELOPE.
</TABLE>
