ELLSWORTH CONVERTIBLE GROWTH & INCOME FUND INC, PRE 14A, 1996-11-21

ELLSWORTH CONVERTIBLE GROWTH & INCOME FUND INC
PRE 14A, 1996-11-21

Previous: MOSLER INC, 10-Q/A, 1996-11-21

Next: BALDWIN PIANO & ORGAN CO /DE/, DFAN14A, 1996-11-21

<PAGE>

SCHEDULE 14A INFORMATION

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 (S)240.14a-11(c) or (S)240.14a-12
________________________________________________________________________________

ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND, INC.

________________________________________________________________________________

(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:

________________________________________________________________________________
<PAGE>

ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND, INC.

65 Madison Avenue, Morristown, New Jersey 07960

---------------------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD JANUARY 11, 1997

---------------------

To The Shareholders:

The annual meeting of shareholders of Ellsworth Convertible Growth and
Income Fund, Inc. (the "Company") will be held on Saturday, January 11, 1997
at 10:30 a.m. local time at the Atlantis Golf Club, 301 Orange Tree Drive,
Atlantis, Florida 33462 for the following purposes:

(1) To elect three directors, each of whom will serve until the annual
meeting of shareholders in 2000, and to elect one director to serve until
the annual meeting of shareholders in 1999, or until their successors are
elected and qualified.

(2) To ratify or reject the selection of Coopers & Lybrand as
independent accountants for the fiscal year ending September 30, 1997.

(3) To approve or disapprove an amendment to the Amended and Restated
Articles of Incorporation, as amended, of the Company to give
shareholders the right to tender their shares during the current fiscal
year.

(4) To transact such other business as may properly come before the
meeting.

Shareholders of record at the close of business on December 3, 1996 are
entitled to vote at the meeting and any adjournments. If you attend the
meeting, you may vote your shares in person. If you do not expect to attend
the meeting, please fill in, date, sign and return the proxy in the enclosed
envelope which requires no postage if mailed in the United States.

It is important that you return your signed proxy promptly so that a quorum
may be assured.

December 5, 1996

Thomas H. Dinsmore
Chairman of the Board of Directors
<PAGE>

ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND, INC.

65 Madison Avenue, Morristown, New Jersey 07960

---------------------

PROXY STATEMENT

---------------------

ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD JANUARY 11, 1997

---------------------

The accompanying proxy is solicited by the Board of Directors of Ellsworth
Convertible Growth and Income Fund, Inc. (the "Company"), in connection with
the annual meeting of shareholders of the Company to be held at the Atlantis
Golf Club, 301 Orange Tree Drive, Atlantis, Florida 33462 at 10:30 a.m. local
time on January 11, 1997 (the "Annual Meeting"). A shareholder can revoke the
proxy prior to its use by appearing at the Annual Meeting and voting in
person, by giving written notice of such revocation to the Secretary of the
Company, or by returning a subsequently dated proxy. The cost of soliciting
proxies will be borne by the Company. The officers, directors and regular
employees of the Company may solicit proxies personally. The Company may also
pay persons holding stock in their names, or those of their nominees, for
their expenses in sending proxies and proxy materials to beneficial owners or
principals.

The Board of Directors has named Thomas H. Dinsmore, Chairman and Chief
Executive Officer, Jane D. O'Keeffe, President, and Sigmund Levine, Senior
Vice President and Secretary, of the Company, as proxies. Unless otherwise
directed by the accompanying proxy, the proxies will vote for the election of
the nominees named below under "Election of Directors," will vote to ratify
the selection of Coopers & Lybrand as independent accountants for the fiscal
year ending September 30, 1997 and will vote against the proposal to amend the
Company's Amended and Restated Articles of Incorporation, as amended (the
"Charter"). Abstentions received and broker non-votes with respect to any
proposal will be counted for purposes of determining whether a quorum is
present at the Annual Meeting. Abstentions and broker non-votes do not count
as votes received but have the same effect as casting a vote against proposals
that require the vote of a majority of the shares present at a meeting,
provided a quorum exists.

The Board of Directors currently knows of no other matters to be presented
to the Annual Meeting. If any other matters properly come before the Annual
Meeting, the proxies will vote in accordance with their best judgment. The
proxies may propose one or more adjournments of the meeting to permit further
solicitation of proxies. No adjournment will be for a period ending later than
April 2, 1997. Any such adjournment will require the affirmative vote of a
majority of the shares present in person or by proxy at the session of the
meeting to be adjourned. The proxies will vote in favor of any such
adjournment those proxies which instruct them to vote in favor of any of the
proposals to be considered at the adjourned meeting, and will vote against any
such adjournment those proxies which instruct them to vote against or to
abstain from voting on all of the proposals to be considered at the adjourned
meeting.
<PAGE>

Shareholders of record at the close of business on December 3, 1996 (the
"Record Date") will be entitled to one vote per share on all business of the
meeting. The Company had [6,643,517] shares of its Common Stock outstanding on
the Record Date. It is expected that this proxy statement and the accompanying
proxy will be first sent to shareholders on or about December 5, 1996.

Upon the request of any shareholder, the Company will furnish, without
charge, a copy of the Company's annual report for the fiscal year ended
September 30, 1996. All such requests should be directed to the Company at 1-
800-914-1177.

ELECTION OF DIRECTORS

The Company's Charter provides for three classes of directors to serve
staggered terms, with each class as nearly equal in number as possible. The
authorized number of directors of the Company is currently fixed at eight,
with two of the three classes having three directors and one of the classes
having two directors. At each annual meeting of shareholders, directors are
elected to succeed those directors whose terms expired and each newly elected
director will serve for a three year term.

For election as directors at the Annual Meeting to be held January 11,
1997, the Board of Directors has approved the nomination of Jane D. O'Keeffe,
William A. Benton, and George R. Lieberman to serve as directors until the
annual shareholders' meeting to be held in 2000. At the Annual Meeting, the
Board of Directors has also approved the nomination of Duncan O. McKee to
serve as a director until the annual shareholders' meeting to be held in 1999.
Mr. McKee was recently appointed a Director to fill a vacancy in the Board
resulting from the death of Mr. Ronald Dinsmore. Each of the nominees is
currently a director of the Company.

The proxies will vote for the election of the nominees named below unless
authority to vote for any or all of the nominees is withheld in the proxy. A
nominee must receive favorable votes from a plurality of the shares voting at
a meeting at which a quorum is present to be elected. Each of the nominees has
indicated that he or she is willing to serve as a director. If any or all of
the nominees should become unavailable for election due to events not now
known or anticipated, the proxies will vote for such other nominee or nominees
as the Board of Directors may recommend, unless the Board reduces the number
of directors.

2
<PAGE>

<TABLE>
<CAPTION>
(1) PRINCIPAL OCCUPATION OR BUSINESS DURING SERVED AS
NOMINEE AGE PAST FIVE YEARS AND (2) CURRENT DIRECTORSHIPS DIRECTOR SINCE
------- --- --------------------------------------------- -----------------
<S> <C> <C> <C>
TERMS EXPIRING IN 2000
William A. Benton 63 (1) Since January 1991, limited partner of June 11, 1986
Gavin, Benton & Co. (New York Stock Ex-
change specialist firm). Since January
1991, Partner in BE Partners (small op-
tions market maker). From June 1986 to
December 1990, partner of Benton & Co.
(New York Stock Exchange specialist
firm).
(2) Director of Bancroft.
George R. Lieberman 74 (1) Retired. Prior to January 1988, Chief January 11, 1990
Executive Officer, Lieberman-Appalucci
(advertising); and President, Interspace
Airport Advertising (advertising).
(2) Director of Bancroft.
TERM EXPIRING IN 1999
Duncan O. McKee 65 (1) Retired. From April 1988 to November November 25, 1996
1996, Director Emeritus of the Company
and Bancroft. Prior to 1988, Partner,
Ballard Spahr Andrews & Ingersoll (law
firm).
(2) Director of Bancroft.
</TABLE>
- --------
* Ms. Jane D. O'Keeffe is an "interested person", as defined by the
Investement Company Act of 1940 (the "Investment Company Act"), of the
Company and Davis-Dinsmore because she is an officer of the Company, and an
officer, director and holder of more than 5% of the issued and outstanding
shares of voting Common Stock of Davis-Dinsmore (the "Class A Stock").

3
<PAGE>

Information regarding the remaining directors of the Company is provided
below:

<TABLE>
<CAPTION>
(1) PRINCIPAL OCCUPATION OR BUSINESS DURING SERVED AS
DIRECTOR AGE PAST FIVE YEARS AND (2) CURRENT DIRECTORSHIPS DIRECTOR SINCE
-------- --- --------------------------------------------- --------------
<S> <C> <C> <C>
TERMS EXPIRING IN 1999
Thomas H. Dinsmore* 43 (1) Since August 1996, Chairman and Chief April 30, 1986
Executive Officer of the Company,
Bancroft, and Davis-Dinsmore. From May
1986 to August 1996, President of the
Company; From November 1985 to August
1996, President of Bancroft. Since April
1994, Director of Davis-Dinsmore. From
August 1988 to August 1996, President of
Davis-Dinsmore. Since February 1983, Se-
nior Analyst of Davis-Dinsmore.
(2) Director of Bancroft.
Donald M. Halsted, Jr. 69 (1) Since October 1983, self employed busi- April 30, 1986
nessman. From January 1983 to October
1983, Vice Chairman--Special Projects,
Lone Star Industries (cement and concrete
materials). From April 1979 to January
1983, President and Chief Operating Offi-
cer, Lone Star Industries.
(2) Director of Bancroft and Aquarian Com-
pany (water company).
TERMS EXPIRING IN 1998
Gordon F. Ahalt 68 (1) Since January 1982, President, G.F.A. April 30, 1986
Inc. (petroleum industry consulting).
Since 1987, Consultant, W. H. Reaves &
Co., Inc. (asset management).
(2) Director of Bancroft; The Harbinger
Group (investments); Cal Dive Interna-
tional (diving service); and The Houston
Exploration Company (oil and gas explora-
tion).
Elizabeth C. Bogan, 51 (1) Since September 1992, Senior Lecturer April 30, 1986
Ph.D. in Economics at Princeton University.
From September 1971 to July 1992, Profes-
sor of Economics at Fairleigh Dickinson
University.
(2) Director of Bancroft.
</TABLE>
- --------
* Mr. Thomas Dinsmore is an interested person of the Company and Davis-
Dinsmore because he is an officer of the Company and an officer, director
and holder of more than 5% of the issued and outstanding shares of the Class
A Stock.

----------------

Directors of the Company, as well as Duncan O. McKee, who served as
Director Emeritus of the Company during the past fiscal year, other than
affiliated persons of the Company, as a group

4
<PAGE>

received aggregate compensation of $43,800 from the Company during its fiscal
year ended September 30, 1996. Directors of the Company, other than affiliated
persons of the Company, currently receive an annual fee of $2,500, plus $1,000
per board meeting when such meetings are called and attended plus expenses of
attending board meetings. During the fiscal year ended September 30, 1996, the
Directors held seven board meetings. The only committee of the Board is the
audit committee. Incumbent directors attended at least 75% of all Board and
committee meetings. Directors do not receive pension or retirement benefits
from the Company.

Set forth below is information regarding the compensation paid during the
fiscal year ended September 30, 1996 for each director of the Company:

<TABLE>
<CAPTION>
TOTAL COMPENSATION
AGGREGATE COMPENSATION FROM COMPANY AND
FROM COMPANY(1) BANCROFT(2)
---------------------- ------------------
<S> <C> <C>
Thomas H. Dinsmore.................... $ -0- $ -0-
Jane D. O'Keeffe...................... $ -0- $ -0-
Gordon F. Ahalt....................... $7,250 $14,375
William A. Benton..................... $7,350 $14,475
Elizabeth C. Bogan, Ph.D. ............ $7,350 $14,575
Donald M. Halsted, Jr................. $7,350 $14,575
George R. Lieberman................... $7,250 $14,475
Duncan O. McKee(3).................... $7,250 $14,375
</TABLE>
- --------
(1) Two of the Company's Directors, Mr. Ronald Dinsmore and Dr. C.O.
Chichester, passed away during the Company's most recently completed
fiscal year. Dr. Chichester received no fees from the Company, and
aggregate compensation from Bancroft of $500. Mr. Ronald Dinsmore received
no fees from either entity.
(2)Bancroft is also advised by Davis-Dinsmore.
(3) Mr. McKee received such fees for serving as Director Emeritus of the
Company and Bancroft.

INVESTMENT ADVISER

Davis-Dinsmore, 65 Madison Avenue, Morristown, New Jersey 07960, serves as
the Company's adviser pursuant to an Investment Advisory Agreement dated as of
August 1, 1996, which became effective on October 25, 1996. For the Company's
fiscal year ended September 30, 1996, pursuant to predecessor Investment
Advisory Agreements in effect during such period, the Company paid Davis-
Dinsmore $555,260 for advisory fees and reimbursed Davis-Dinsmore an
additional $25,000 for expenses associated with the Treasurer's office. Davis-
Dinsmore also serves as the Company's administrator.

Thomas H. Dinsmore, Chairman and Chief Executive Officer of the Company, is
also Chairman and Chief Executive Officer of and Senior Analyst for Davis-
Dinsmore. Mr. Thomas Dinsmore owns 40.6% of Davis-Dinsmore's Class A Stock.
Jane D. O'Keeffe, President of the Company and Davis-Dinsmore, is the sister
of Thomas H. Dinsmore. Ms. O'Keeffe owns 35.6% of Davis-Dinsmore's Class A
Stock. Sigmund Levine, Senior Vice President and Secretary of the Company, is
also Treasurer and Secretary of Davis-Dinsmore. H. Tucker Lake, Vice
President, Trading of the Company, is the first cousin of Mr. Thomas Dinsmore
and Ms. O'Keeffe. Gary Levine, Treasurer of the Company, is the son of Sigmund
Levine.

5
<PAGE>

RATIFICATION OR REJECTION OF SELECTION OF ACCOUNTANTS

The Board of Directors, including a majority of the directors who are not
interested persons of the Company or Davis-Dinsmore, has selected Coopers &
Lybrand as independent accountants to examine and verify the accounts and
securities of the Company for its fiscal year ending September 30, 1997, and
to report thereon to the Board and the shareholders. This selection will be
submitted for ratification or rejection at the Annual Meeting. A
representative of such firm is not expected to be present at the meeting.

The Board of Directors has an audit committee consisting of Dr. Bogan, Mr.
Halsted and Mr. Benton. The audit committee was created to meet periodically
with the Company's independent accountants to review the scope of audit
examinations of the Company, the Company's accounting policies and procedures
and new developments in financial accounting standards applicable to
investment companies. The audit committee also was created to review the
quality and performance of the Company's accounting and financial staff.
During the fiscal year ended September 30, 1996, the audit committee met once.

The Board of Directors recommends that you vote FOR ratification of
selection of the accountants.

APPROVAL OR DISAPPROVAL OF
AMENDMENT TO THE COMPANY'S CHARTER

BACKGROUND

Article IX of the Company's Charter provides that in the event that, during
the twelve-week period ended November 15, 1996, the Company's shares of Common
Stock traded on the American Stock Exchange at more than a 5% discount from
net asset value, the Company would submit to its shareholders a proposal, to
the extent consistent with the Investment Company Act, to amend the Company's
Charter to give shareholders the right to tender their shares to the Company
at the end of each of the three remaining quarters of the Company's current
fiscal year.

For the twelve-week period ended November 15, 1996, the Company's shares of
Common Stock traded on the American Stock Exchange at a discount of
approximately 15% from net asset value. As a result, the provisions of Article
IX of the Company's Charter were triggered. The Board of Directors of the
Company thus was required to adopt and submit to shareholders for their
approval an amendment to the Company's Charter, to the extent consistent with
the Investment Company Act, that would give shareholders the right to tender
their shares to the Company at net asset value on March 31, June 30 and
September 30, 1997.

At the Annual Meeting, the following resolution will be submitted to a vote
of shareholders:

RESOLVED, that the Charter of the Company be and it hereby is amended by
adding a new Article XII, which Article shall read in full as follows:

ARTICLE XII

Each holder of shares of common stock of the Corporation
shall have the right to tender all of such shares to the
Corporation for purchase on March 31,

6
<PAGE>

1997, June 30, 1997 and September 30, 1997 (each, a "Purchase
Date") at net asset value as of the close of business on each
such Purchase Date; provided, however, that the Corporation
may suspend such right (a) for any period (i) during which the
New York Stock Exchange is closed other than customary week-
end and holiday closings or (ii) during which trading on the
New York Stock Exchange is restricted; (b) for any period
during which an emergency exists as a result of which (i)
disposal by the Corporation of securities owned by it is not
reasonably practicable or (ii) it is not reasonably
practicable for the Corporation fairly to determine the value
of its net assets; or (c) for such other periods as the
Securities and Exchange Commission may by order permit for the
protection of security holders of the Corporation.

ADOPTION OF THE PROPOSED CHARTER AMENDMENT WOULD ENABLE SHAREHOLDERS TO
REDEEM THEIR SHARES AT NET ASSET VALUE AND WOULD ELIMINATE THE RISK THAT A
SHAREHOLDER WHO DESIRES TO DISPOSE OF HIS SHARES WOULD OTHERWISE HAVE TO DO SO
AT THE MARKET PRICE, WHICH DURING THE PAST FIVE CALENDAR YEARS HAS AVERAGED A
11.72% DISCOUNT TO NET ASSET VALUE. ADOPTION OF THE PROPOSED CHARTER AMENDMENT
MAY ALSO RESULT IN A REDUCTION OF THE MARKET DISCOUNT.

DIRECTORS' RECOMMENDATION

FOR THE REASONS DISCUSSED BELOW, THE BOARD OF DIRECTORS, INCLUDING ALL
DIRECTORS WHO ARE NOT AFFILIATED WITH DAVIS-DINSMORE, UNANIMOUSLY OPPOSES THE
PROPOSED CHARTER AMENDMENT AND RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST IT
(PROPOSAL 3) ON THE ENCLOSED PROXY.

FACTORS CONSIDERED BY BOARD OF DIRECTORS

In opposing the adoption of the proposed Charter Amendment, the Board of
Directors took into account the following factors.

PAST PERFORMANCE OF THE COMPANY

The Company was established as a vehicle for long-term investment through
participation in a professionally managed portfolio of convertible bonds and
preferred stocks. The Company's investment objective is to seek a high level
of total return on its assets through a combination of current income and
capital appreciation. The Board of Directors believes that the Company has
succeeded in its objective. During the period beginning as of the commencement
of the Company's operations in June 1986 through September 30, 1996, the net
asset value per share of the Company, with dividends and capital gains
reinvested at net asset value, increased by 170.6%. Over the twelve months
ended September 30, 1996, the Company's net asset value per share increased
17.4%.

For fiscal 1996, the Company's shareholders received distributions from
investment income and capital gains of approximately 6.9% based on the
Company's net asset value and approximately 8.2% based on the Company's market
price, both as of November 8, 1996. In addition, on October 25, 1996, the
Company declared a distribution payable November 28, 1996 of $1.13 per share
from investment income and capital gains representing approximately 11% of the
Company's market price as of the date of declaration. Although past
performance, including distributions that have been paid to shareholders, is
no guarantee of future performance, based on the Company's performance, the
Board of Directors believes that the Company will continue to serve as an
appropriate investment vehicle for its

7
<PAGE>

shareholders by providing a high level of total return on its assets through a
combination of current income and capital appreciation.

MARKET DISCOUNTS PROVIDE INVESTMENT OPPORTUNITIES

Shares of closed-end investment companies frequently trade at market prices
which reflect a discount to the shares' underlying net asset value. The Company
included the provisions of Article IX in its Charter in 1986 in conformity with
the common view of underwriters at such time that the existence of such
provisions would minimize the extent to which the Company's shares traded at a
discount to their net asset value and thus would make the shares a more
attractive investment option to investors. The Company believes that such
provision has not reduced the market discount for the Company's shares. During
the past five calendar years, the market discount has averaged 11.72%. During
the same time period, closed-end convertible funds have traded at an average
discount of 8.5%.

The Board of Directors believes that since the Company was formed in 1986,
investors in closed-end investment companies have become accustomed to market
discounts and have taken advantage of the opportunities such discounts present.
As noted above, during the past five calendar years, the Company has traded at
an average discount to net asset value of 11.72%. Investors who purchased
shares of the Company for this period received a return on $113.28 of assets
for every $100 they invested.

The Board of Directors has concluded that the future of the Company should
not be tied to whether the Company's shares have traded at a discount to net
asset value. Instead, the Company's future should be based on its success in
meeting its investment objective.

TENDERS WOULD ADVERSELY AFFECT THE COMPANY'S OPERATIONS

The Board of Directors currently believes that automatic repurchases by the
Company of its shares through tender offers ("share repurchases") are not in
the best interests of the Company and its shareholders as a whole. In reaching
this conclusion, the Directors took into account the effect that share
repurchases would have on: the discount of the Common Stock's market price from
net asset value; the continued listing of the Common Stock by the American
Stock Exchange (the Exchange will consider delisting if the aggregate market
value of the Company's outstanding shares is less than $1,000,000, the number
of publicly held shares falls below 200,000 or the number of round-lot holders
falls below 300); the Company's expense ratio, since share repurchases would
result in the allocation of the Company's fixed expenses over a smaller base of
assets; the Company's ability to achieve its investment objective and the
Company's investment performance; and the Company's status as a regulated
investment company under the Internal Revenue Code of 1986, as amended (the
"Code").

The Company would be required to liquidate portfolio securities to fund any
share repurchases since it has limited ability to borrow. In liquidating
securities, the Company would incur transaction costs. If the Company were
required to liquidate a significant portion of its portfolio, it would have
lesser bargaining power in disposing of its securities. The transaction costs
and the possible lower prices received would likely reduce the net asset value
of the Company's shares, and, therefore, the

8
<PAGE>

amounts distributable to tendering shareholders. In addition, as a result of
share repurchases, the Board of Directors may be required to recommend the
liquidation, merger or other reorganization of the Company.

If, as a result of share repurchases, the Company did not qualify as a
regulated investment company under the Code, the Company's income would be
taxed at the corporate level in addition to the taxation of shareholders who
receive dividends from the Company. Generally, shareholders who tender their
shares would recognize a capital gain (or loss) to the extent the amount they
receive exceeds (or is less than) the amount they paid for their shares. Such
capital gain (or loss) will be long term capital gain (or loss) only if shares
have been held more than one year.

POTENTIAL ADVANTAGES TO SHAREHOLDERS

The Directors recognized that a potential advantage to the adoption of the
Charter Amendment is that shareholders would be able to redeem their shares at
net asset value and would not incur the risk that a shareholder who desires to
dispose of his shares would otherwise have to do so at the market price, which
during the past five calendar years has averaged a 11.72% discount to net asset
value. In such event, shareholders would maximize the return on their
investment in the near term. The Directors also recognized that adoption of the
proposed Charter Amendment may result in a reduction of the market discount.
However, as discussed above, if the Company were required to liquidate a
significant portion of its portfolio to fund such share repurchases, its
reduced bargaining power and the associated transaction costs would likely
reduce the net asset value of the Company's shares and, therefore, the amounts
distributable to tendering shareholders.

POTENTIAL CONFLICTS DISCLOSED

At the time of the Directors' deliberations, two of the Company's Directors
were also officers and directors of Davis-Dinsmore (the "Interested
Directors"). The Interested Directors pointed out to the Board that while they
were aware that a reduction in the size of the Company as a result of automatic
share repurchases would necessarily result in a reduction in the amount of
advisory fees payable to Davis-Dinsmore, they independently focused upon the
long-term interests of the Company and its shareholders as a whole, and
believed that the proposed Charter Amendment was not in the best interests of
the Company and its shareholders as a whole.

After deliberation by all Directors, all five Directors of the Company who
are not affiliated with Davis-Dinsmore, as well as the entire Board of
Directors, voted affirmatively to recommend that shareholders vote against the
proposed Charter Amendment.

MECHANICS OF TENDERS

The Company may suspend shareholders' right to tender their shares (a) for
any period (i) during which the New York Stock Exchange is closed (other than
customary weekend and holiday closings or (ii) during which trading on the New
York Stock Exchange is restricted); (b) for any period during which an
emergency exists as a result of which (i) disposal by the Corporation of
securities owned by it is not reasonably practicable or (ii) it is not
reasonably practicable for the Corporation fairly to determine the value of its
net assets; or (c) for such other periods as the Securities and Exchange
Commission may by order permit for the protection of security holders of the
Corporation.

9
<PAGE>

In addition, the Board of Directors intends to follow a policy, which it
may change, to suspend shareholders' right to tender if there is, in the
judgment of the Board of Directors, any material (a) legal action or
proceeding instituted or threatened challenging such transaction or otherwise
materially adversely affecting the Company, (b) declaration of a banking
moratorium by Federal, state or foreign authorities or any suspension of
payment by banks in the United States, New York State or foreign countries in
which the Company invests, (c) limitations affecting the Company or the
issuers of its portfolio securities imposed by Federal, State or foreign
authorities on the extension of credit by lending institutions or on the
exchange of foreign currency, or (d) commencement of war, armed hostilities or
other international or national calamity directly or indirectly involving the
United States or other countries in which the Company invests. The Board of
Directors may modify these conditions in light of circumstances existing at
the time.

Any tender offer made by the Company will be made and shareholders notified
in accordance with the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act, either by publication or mailing or both. Each
offering document will contain such information as is prescribed by such laws
and the rules and regulations promulgated thereunder. Throughout any such
tender offer, the Company will establish procedures to make current net asset
value publicly available. A shareholder wishing to accept the offer may be
required to tender all of the shares owned by such shareholder (or attributed
to him for Federal income tax purposes under Section 318 of the Code). The
Company will purchase shares tendered in accordance with the terms of the
offer unless it determines not to proceed with such purchase (based upon one
of the conditions set forth above). Each person tendering shares will pay to
the Company's transfer agent a service charge of $25.00 (which is subject to
change) to help defray certain costs, including the processing of tender
forms, effecting payment, postage and handling. Any such service charge will
be paid directly by the tendering shareholder and will not be deducted from
the proceeds of the purchase. The Company's transfer agent will receive the
fee as an offset to these costs. Costs associated with the tender incurred by
the Company will be charged against capital.

Tendered shares that are accepted and purchased by the Company will
constitute authorized but unissued shares.

REQUIRED APPROVAL

Holders of two-thirds of the shares of Common Stock of the Company that are
issued and outstanding must vote in favor of the Charter Amendment for such
amendment to be adopted.

10
<PAGE>

ADDITIONAL INFORMATION

EXECUTIVE OFFICERS.

Executive officers of the Company are elected by the Board of Directors and
serve at the pleasure of the Board. Such officers do not receive any
compensation from the Company for their services. The following table sets
forth certain information about executive officers of the Company.

<TABLE>
<CAPTION>
OFFICER POSITION WITH BUSINESS EXPERIENCE DURING
NAME AGE SINCE THE COMPANY PAST FIVE YEARS
- ---- --- ------- ------------- --------------------------
<S> <C> <C> <C> <C>
Thomas H. Dinsmore 43 1986 Chairman and Chief See page 4 of this proxy
Executive Officer statement.
Jane D. O'Keeffe 41 1994 President See page 2 of this proxy
statement.
Sigmund Levine 72 1986 Senior Vice President and Since January 1996, Se-
Secretary nior Vice President of
the Company. From April
1993 to January 1996, Ex-
ecutive Vice President,
and since May 1986 Secre-
tary of the Company.
Since February 1996, Se-
nior Vice President, and
from April 1993 to Febru-
ary 1996, Executive Vice
President of Bancroft.
Since November 1982, Sec-
retary of Bancroft and
Treasurer and Secretary
of Davis-Dinsmore. From
May 1986 to April 1993,
Treasurer of the Company.
From November 1982 to
April 1993, Treasurer of
Bancroft.
H. Tucker Lake 49 1994 Vice President, Trading Since April 1994, Vice
President, Trading of the
Company and of Bancroft.
Prior thereto, Sales As-
sociate, Coldwell Banker,
Schlott Realtors.
Gary I. Levine 39 1993 Treasurer Since April 1993, Trea-
surer of the Company and
of Bancroft. Since June
1986, Assistant Secretary
of the Company and of
Bancroft. Since April
1994, Assistant Secretary
and Assistant Treasurer
of Davis-Dinsmore.
</TABLE>

11
<PAGE>

SECURITY OWNERSHIP OF MANAGEMENT.

The following table sets forth certain information regarding the ownership
of the Company's shares of Common Stock by directors and officers of the
Company.

<TABLE>
<CAPTION>
SHARES OF
COMPANY OWNED
BENEFICIALLY
DECEMBER 3,
1996*
-------------
<S> <C>
Gordon F. Ahalt.............................................. 1,168
William A. Benton............................................ 2,335
Elizabeth C. Bogan, Ph.D..................................... 5,138
Thomas H. Dinsmore........................................... 9,845(1)
Donald M. Halsted, Jr........................................ 2,298
George R. Lieberman.......................................... 864
Jane D. O'Keeffe............................................. 1,909
Duncan O. McKee.............................................. 2,563
Sigmund Levine............................................... 3,031
H. Tucker Lake............................................... 6,975(2)
Gary I. Levine............................................... 227(3)
</TABLE>
- --------
* Represents for each director and officer less than 1% of the outstanding
shares of Common Stock of the Company. As of December 3, 1996, directors
and officers of the Company beneficially owned in the aggregate [36,353]
shares of Common Stock of the Company representing approximately [0.5%] of
the shares outstanding. Except as otherwise indicated, each director and
officer possessed sole investment and voting power with respect to shares
of Common Stock beneficially owned.
(1) Mr. Thomas Dinsmore possessed sole investment and voting power with
respect to 8,007 shares of Common Stock beneficially owned by him and
possessed shared investment and voting power with respect to 1,697 shares
of Common Stock beneficially owned by him and possessed shared investment
power with respect to 141 shares of Common Stock beneficially owned by
him. The number of shares of Common Stock of the Company owned by Mr.
Thomas Dinsmore does not include 489 shares owned by his wife, as to which
shares Mr. Thomas Dinsmore disclaims beneficial ownership.
(2) Mr. H. Tucker Lake possessed sole investment and voting power with respect
to 1,168 shares of Common Stock beneficially owned by him and possessed
shared investment and voting power with respect to 5,807 shares of Common
Stock beneficially owned by him.
(3) Mr. Gary Levine possessed sole investment and voting power with respect to
117 shares of Common Stock beneficially owned by him and possessed shared
investment and voting power with respect to 110 shares of Common Stock
beneficially owned by him. The number of shares of Common Stock of the
Company owned by Mr. Gary Levine does not include 600 shares owned by his
wife, as to which shares Mr. Levine disclaims beneficial ownership.

PRINCIPAL HOLDERS OF THE COMPANY'S STOCK.

The Company knows of no beneficial owners of more than 5% of the Company's
outstanding Common Stock.

CERTAIN TRANSACTIONS.

Peter Finnican is the brother-in-law of both Thomas H. Dinsmore, Chairman
and Chief Executive Officer of each of the Company, Bancroft, and Davis-
Dinsmore, and Jane D. O'Keeffe,

12
<PAGE>

President of each of the Company, Bancroft, and Davis-Dinsmore. Mr. Finnican
is a partner of Forum Capital Markets, L.P. (the "Forum Group") a
broker/dealer located at 53 Forest Avenue, Old Greenwich, Connecticut. Mr.
Finnican's ownership interest in the Forum Group equals approximately 6%.

During fiscal 1996, the Company acquired $1,025,000 of securities from the
Forum Group in transactions in which the Forum Group acted as principal.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, Section 30(f) of the
Investment Company Act, and the regulations of the Securities and Exchange
Commission thereunder require the Company's officers and directors and direct
or indirect beneficial owners of more than 10% of the Company's Common Stock,
as well as Davis-Dinsmore, its directors and officers and certain of its other
affiliated persons (collectively, "Reporting Persons"), to file initial
reports of ownership and changes in ownership with the Securities and Exchange
Commission and the American Stock Exchange. Reporting Persons are required to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on its review of the copies of such forms received by it and written
representations, the Company believes that all filing requirements applicable
to the Reporting Persons have been complied with during the fiscal year ended
September 30, 1996, except that (i) Davis-Dinsmore did not file a Form 3 upon
commencement of its activities as investment adviser to the Company in June
1986 and did not separately report on Form 4s 2,000 shares of the Company it
purchased in 1987 or 1,000 shares of the Company it purchased in 1994, as well
as additional shares acquired upon reinvestment of dividends and
distributions, until November 19, 1996 when it filed a Form 5 (which was 5
days late), and Mrs. Jean Dinsmore did not file a Form 3 in June, 1986 as a
result of her position as a director of Davis-Dinsmore and did not separately
report on Form 4, 231 shares of the Company she purchased in 1988, as well as
additional shares acquired upon reinvestment of dividends and distributions,
until November 11, 1996 when she filed a Form 3 and November 13, 1996 when she
filed a Form 5, although in each case all such shares had previously been
reported on Section 16(a) forms that had been filed by Mr. Ronald Dinsmore
(now deceased), who at such dates was the primary owner of Davis-Dinsmore and
the husband of Mrs. Jean Dinsmore; (ii) Ms. Sally Finnican, who was appointed
a director of Davis-Dinsmore on September 26, 1996, filed a Form 3 one month
late; and (iii) Mr. H. Tucker Lake, who purchased an aggregate of 559 shares
of the Company in June 1996, filed a Form 4 two days late.

SHAREHOLDER PROPOSALS

To be considered for inclusion in the Company's proxy statement and proxy
for the 1998 annual meeting of shareholders, shareholder proposals must be
received no later than August 1, 1997.

OTHER BUSINESS

The management knows of no business to be presented to the meeting other
than the matters set forth in this proxy statement.

By order of the Board of Directors,

Thomas H. Dinsmore
Chairman of the Board of Directors

December 5, 1996.

13
<PAGE>

ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND, INC.

ANNUAL MEETING TO BE HELD JANUARY 11, 1997

THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned appoints Thomas H. Dinsmore, Jane D. O'Keeffe, Sigmund
Levine, and each of them, attorneys and proxies, with power of substitution in
each, to vote and act on behalf of the undersigned at the annual meeting of
shareholders of Ellsworth Convertible Growth and Income Fund, Inc. (the
"Company") at the Atlantis Golf Club, 301 Orange Tree Drive, Atlantis, Florida
33462 on January 11, 1997 at 10:30 a.m., and at all adjournments, according to
the number of shares of Common Stock which the undersigned could vote if
present, upon such subjects as may properly come before the meeting, all as set
forth in the notice of the meeting and the proxy statement furnished therewith.

UNLESS OTHERWISE MARKED ON THE REVERSE HEREOF, THIS PROXY IS GIVEN WITH
AUTHORITY TO VOTE FOR DIRECTORS LISTED ON THE REVERSE HEREOF, FOR THE PROPOSAL
TO RATIFY THE BOARD'S SELECTION OF ACCOUNTANTS, AND AGAINST THE PROPOSAL TO
AMEND THE COMPANY'S CHARTER.

(Continued, and to be signed and dated, on the reverse side.)

ELLSWORTH CONVERTIBLE GROWTH AND INCOME
FUND, INC.
P.O. BOX 11118
NEW YORK, N.Y. 10203-0118
<PAGE>

1.Election of Directors of all nominees listed below for the terms specified in
the proxy statement.

FOR all nominees listed below [X]

WITHHOLD AUTHORITY to vote for all nominees listed below. [X]

*EXCEPTIONS [X]

Board of Directors nominees: Jane D. O'Keeffe, William A. Benton, George R.
Lieberman and Duncan O. McKee.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and write that nominee's name in the space provided
below.)
*Exceptions
------------------------------------------------------------------
The Board of Directors recommends voting "FOR" Proposal 2 and "AGAINST"
Proposal 3.
<TABLE>
<CAPTION>
<S> <C>
2. Proposal to ratify the selection of accountants. 3. Proposal to amend Company's Charter.

For [X] Against [X] Abstain [X] For [X] Against [X] Abstain [X]

</TABLE>

Change of Address and or Comments Mark Here [X]

If shares are held jointly each shareholder named should sign. Legal
representatives of shareholders should add their titles when signing.

Dated , 19
--------------------------------------------------------------------

- --------------------------------------------------------------------------------
Signature

- --------------------------------------------------------------------------------
Signature, if held jointly

VOTES MUST BE INDICATED (X) IN BLACK OR BLUE INK [X]

SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.