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SIGNATURE GARY LEVINE
TITLE TREASURER
SUB-ITEM 77C: Submission of matters to a vote of security holders
At Registrant's Annual Meeting of Shareholders held on January 11, 1997, a pro-
posal to amend the Articles of Incorporation, that would give shareholders the
right to tender their shares during the current fiscal year, was voted upon.
There were 839,938 shares voted for and 2,134,249 shares voted against the
charter amendment. There were 2,901,616 shares that were broker non-votes.
A Special Meeting of Shareholders was held on October 25, 1996, at which
3,408,247 shares were present. The matters voted upon, a new investment advisory
agreement and changes to three fundamental investment policies, were approved as
follows:
Broker
For Against Abstentions non-votes
New advisory agreement with 3,151,425 97,926 158,896 0
Davis-Dinsmore Management
Company
Change policy regarding 2,917,042 204,920 126,176 160,109
purchase of securities of
foreign issuers
Change policy imposing a history 2,946,790 167,813 133,535 160,109
of operations requirement
Eliminate policy regarding 2,650,600 429,132 168,406 160,109
illiquid and restricted securities
FUNDAMENTAL POLICY CHANGES
At a special meeting of shareholders held on October 25, 1996, shareholders
approved a change to the Company's fundamental investment policy which limits
investment in securities of foreign issuers to permit the purchase of U.S.
dollar-denominated securities convertible into American Depository Receipts
ADRs). ADRs are certificates representing an ownership interest in a security
or a pool of securities issued by a foreign issuer and deposited with a
depositary, typically a bank, and held in trust for the investor.
At such special shareholders meeting, shareholders also approved an amendment
that allows the Company to look to either the issuer or the guarantor of
securities to satisfy the Company's history of operations requirement.
Also at the aforementioned special meeting, shareholders approved the
elimination of the fundamental investment policy regarding the purchase of
illiquid and restricted securities. That policy prohibited the Company from
investing more than 10% of its total assets in restricted securities. The
Board of Directors has instead adopted a nonfundamental investment policy
which provides that the Company may not purchase the securities of an issuer
if, after giving effect to such purchase, more than 20% of its net assets
would be invested in illiquid securities.
SUB-ITEM 77Q1 FINAL INV ADV CONTRACT
ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND, INC.
Investment Advisory Agreement
August 1, 1996
(Approved October 25, 1996)
DAVIS-DINSMORE MANAGEMENT COMPANY
65 Madison Avenue
Morristown, New Jersey 07960
Gentlemen:
The undersigned, Ellsworth Convertible Growth and Income Fund, Inc.,
a Delaware corporation (the "Company"), is an investment company
registered under the Investment Company Act of 1940 (the "Act").
The Company is a diversified closed-end investment company, and
invests and reinvests its assets. The Company hereby engages you to
act as its Investment Adviser and to supervise certain of its
affairs, subject to the terms and conditions herein set forth.
Section 1. Advisory Services. The Company will from time to
time furnish to you detailed statements of its investments and
resources and information as to its investment needs, and will make
available to you such financial reports, proxy statements, legal and
other information relating to its investments as may be in the
possession of the Company or available to it. You shall, at your
expense, furnish to the Company, at the regular executive offices of
the Company, continuing investment information, advice and
recommendations with respect to the purchase and sale of investments
and the making of commitments with respect thereto. In giving such
advice and making such recommendations, you shall be guided by the
Company's investment policy as delineated by the statements contained
in the various documents filed with the Securities and Exchange
Commission as such documents may from time to time be amended. You
shall place at the disposal of the Company such statistical, research,
analytical and technical services, information and reports as may
reasonably be required. Your advice and recommendations with respect
to the purchase and sale of investments and the making of investment
commitments shall be submitted at the principal office of the Company
to an officer or officers of the Company designated for that purpose by
the Board of Directors of the Company. Such officer or officers shall
have, subject to the control of the Company's Board of Directors, sole
responsibility for investment decisions, and full authority to act upon
your advice and recommendations and to place orders on behalf of the
Company for the purchase and sale of portfolio securities. Reports of
portfolio transactions shall be made monthly to the Board of Directors
of the Company.
Section 2. Independent Contractor. You shall, for all
purposes hereof, be deemed to be an independent contractor and shall
have no authority to act for or represent the Company unless otherwise
provided. No agreement, bid, offer, commitment, contract or other
engagement entered into by you, whether on your behalf or whether
purported to have been entered into on behalf of the Company, shall be
binding upon the Company, and all acts authorized to be done by you
under this contract shall be done by you as an independent contractor
and not as agent.
Section 3. Expenses. To the extent described in this Section
3, you shall provide the Company with office space and facilities, pay
the salaries of its executive officers and furnish clerical,
bookkeeping and statistical services to the Company.
The Company will pay all expenses incurred by it and not
assumed by you including, but not by way of limitation, expenses in
connection with its organization and with the offering of its
securities; fees and expenses of its unaffiliated directors; salaries
of employees other than executive officers; the compensation and
related personnel expenses of the Treasurer of the Company and all
personnel working under the Treasurer's direction and the expenses of
office space, facilities, and equipment used by the Treasurer and such
personnel in performance of their duties to the Company in an aggregate
amount not to exceed $50,000 per year; legal and accounting fees, fees
of custodian, registrar, transfer agents and dividend disbursing
agents; taxes, interest, brokerage commissions; direct costs of
postage, printing, copying and travel expenses attributable to the
conduct of the business of the Company, etc. You shall assume and pay
all expenses incurred by you in performance of this contract.
Section 4. Compensation. As compensation for these services,
the Company will pay to you on the last day of each month a fee for
such month computed at an annual rate of 3/4 of 1% of the first
$100,000,000 and 1/2 of 1% of the excess over $100,000,000 of the
Company's net asset value in such month, subject to reduction as
follows: the annual fee payable shall be reduced to the extent the
Company's ordinary expenses for the year (including your fee but
excluding interest, local, state and Federal taxes on the Company and
extraordinary items) exceed 1.5% of the first $100,000,000 and 1% of
the excess over $100,000,000 of the average of the monthly net asset
values of the Company for the twelve months of such year. You will
promptly refund any amount theretofore paid in excess of the fee
determined to be due for such year. For the purpose of calculation of
the fee, the net asset value for a month will be the average of the
Company's net asset values at the close of business on the last
business day on which the New York Stock Exchange is open in each week
in the month. The determination of what constitutes an "extraordinary
item" rather than an ordinary expense shall be conclusively determined
by the directors of the Company who are not "interested persons" of
either the Company or you, as defined by the Act.
If this contract shall become effective subsequent to the first
day of a month, or shall terminate before the last day of a month, your
compensation for such fraction of the monthly period shall be
determined by applying the foregoing percentage to the net asset value
of the Company during such fraction of a monthly period (which net
asset value shall be determined in such reasonable manner as the Board
of the Company shall deem appropriate) and in the proportion that such
fraction of a monthly period bears to the entire month.
Compensation under this contract will begin to accrue on its
effective date.
Section 5. Approval of Contract; Termination. This contract
will be submitted to the Company's shareholders for approval. If
approved by the vote of a majority of the Company's outstanding shares
of common stock as defined in the Act, the contract will be in effect
from the date of approval. Unless terminated by either party, this
contract will continue in force from year to year so long as the
continuance is specifically approved at least annually either (i) by
the Board of Directors of the Company or (ii) by the vote of a majority
of the outstanding voting securities of the Company as defined in the
Act, provided that in either event the contract is also approved by the
vote of a majority of the directors of the Company who are not
interested persons, as defined in the Act, of the Company or of you,
cast in person at a meeting called for the purpose of voting on such
approval. The contract is terminable without penalty by either party
on sixty days' written notice and will terminate automatically in the
event of any assignment.
Except as specified above, this contract may not be amended,
transferred, assigned, sold or in any other manner hypothecated or
pledged; provided, that this limitation shall not prevent any minor
amendments to the contract which may be required by Federal or state
regulatory bodies.
Section 6. Liability. You shall give the Company the benefit
of your best judgment and efforts in rendering the services set forth
herein, and the Company agrees as an inducement to the undertaking of
these services by you that you shall not be liable for any error of
judgment or for any loss suffered by the Company in connection with any
matters to which this contract relates except that nothing herein
contained shall be construed to protect you against any liability by
reason of willful misfeasance, bad faith or gross negligence in the
performance of your duties or by reckless disregard of your obligations
or duties under this contract.
Section 7. Multiple Capacities. Except to the extent
necessary for performance of your obligations hereunder, nothing shall
restrict your right or any of your directors, officers or employees who
may be directors, officers or employees of the Company to engage in any
other business or to devote time and attention to the management or
other aspects of any other business whether of a similar or dissimilar
nature or to render services of any kind to any other corporation,
firm, individual or association.
It is understood and agreed that the directors, officers,
agents, employees and shareholders of the Company may be interested in
your company as directors, officers, shareholders, employees, agents or
otherwise, and the directors, officers, agents, employees and
shareholders of your company may be interested in the Company as a
shareholder or otherwise.
Section 8. Concerning Applicable Provisions of Law, Etc. This
contract shall be subject to all applicable provisions of law,
including, but not limited to, the applicable provisions of the Act;
and, to the extent that any provisions herein contained conflict with
any such applicable provisions of law, the latter shall control.
The laws of the State of New York shall, except to the extent
that any applicable provisions of some other law shall be controlling,
govern the construction, validity and effect of this contract.
The headings preceding the text of the several sections herein
are inserted solely for convenience of reference and shall not affect
the meaning, construction or effect of this contract.
If the contract set forth herein is acceptable to you, please
so indicate by executing the enclosed copy of this letter and returning
the same to the undersigned, whereupon this letter
shall constitute a binding contract between the parties hereto, subject
to approval provided for in Section 5.
Yours very truly,
ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND, INC.
By: /s/ Thomas H. Dinsmore
Thomas H. Dinsmore
(President)
(Corporate Seal)
Attest: /s/ Sigmund Levine
Sigmund Levine
(Secretary)
DAVIS-DINSMORE MANAGEMENT
COMPANY
By: /s/ Thomas H. Dinsmore
Thomas H. Dinsmore
(President)
Attest:/s/ Sigmund Levine
Sigmund Levine
(Secretary)
(Corporate Seal)
Form N-SAR
For period ended 03/31/97
File Number 811-4656
This report is signed on behalf of the Registrant in the City of
Morristown and State of New Jersey on the 28th day of May, 1997.
Ellsworth Convertible Growth and
Income Fund, Inc.
Name of Registrant
By: /s/ Gary I. Levine
Gary I. Levine
Treasurer
Witness:/s/ Thomas H. Dinsmore
Thomas H. Dinsmore
Chairman
