<PAGE> 1
ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND, INC.
(LOGO)
1999 Annual Report
September 30, 1999
<PAGE> 2
Ellsworth Convertible Growth and Income Fund, Inc. operates as a closed-end,
diversified management investment company and invests primarily in convertible
securities, with the objectives of providing income and the potential for capi-
tal appreciation--which objectives the Company considers to be relatively equal,
over the long-term, due to the nature of the securities in which it invests.
HIGHLIGHTS
Performance thru 9/30/99 (with dividends reinvested)
<TABLE>
<S> <C> <C> <C> <C>
9 Months 1 Year 5 Year 10 Year
-------- ------ ------- -------
Ellsworth market value............. 0.11% 10.39% 111.42% 231.06%
Ellsworth net asset value *........ 3.51 17.31 106.05 213.77
Closed-end convertible fund average 8.91 17.12 79.73 192.39
S&P 500 +.......................... 5.37 27.79 205.42 372.6
Russell 2000 +..................... 2.33 19.15 66.84# 139.77#
</TABLE>
Performance data represent past results and do not reflect future performance.
* From Lipper, Inc. Closed-End Fund Performance Analysis.
+ From Bloomberg L.P. pricing service.
# Simple appreciation of index.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Quarterly History of NAV and Market Price
Net Asset Values Market Prices (AMEX, symbol ECF)
Qtr Ended High Low Close High Low Close
- --------- ------ ------ ------ ------ ----- -----
<S> <C> <C> <C> <C> <C> <C>
Dec 1998 $11.39 $10.04 $11.11 $10.63 $8.88 $9.63
Mar 1999 11.50 10.99 11.44 10.00 9.38 9.75
Jun 1999 11.84 11.15 11.69 9.94 9.19 9.63
Sep 1999 12.18 11.18 11.23 10.00 9.06 9.38
</TABLE>
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Dividend Distributions (12 Months)
Record Payment Capital *Corporate
Date Date Income Gains Total Deduction
- -------- -------- ------ ------- ------ ----------
<S> <C> <C> <C> <C> <C>
11/2/98 11/28/98 $0.048 $1.362 $1.410 50%
2/8/99 2/22/99 0.090 --- 0.090 49
5/13/99 5/27/99 0.090 --- 0.090 49
8/16/99 8/30/99 0.090 --- 0.090 49
------ ------ ------
$0.318 $1.362 $1.680
</TABLE>
* Percentage of each ordinary income distribution qualifying for the dividend
received tax deduction by corporate shareholders.
<PAGE> 3
TO OUR SHAREHOLDERS
The market is moving through a period of uncertainty; uncertainty as to the
direction of interest rates, inflation and corporate profits. This kind of
uncertainty makes for a skittish and volatile stock market. The interest rate
on 30 year U.S. Treasury Bonds rose from 5% in October 1998 to 6.38% in
October 1999. It has fallen to 6.09% so far this month. Inflation as
measured by the Producer Price All Commodities Index (PPACI) was deflating at
a year over year rate of 3.4% a year ago and rose at a year over year rate of
3.4% in September of this year. Finally, corporate profits that had been
growing at over 10% per year through much of this decade are now expected to
grow at roughly 8% per year. These changes tend to make the market riskier
and more volatile.
On the positive side, money continues to flow into pension plans and 401K
plans. Interest rates have not broken out of their long secular trend down
from their peak in 1981 and the rise in the PPACI may only reflect the rebound
in Asia that actually could help corporate profits in the future. Therefore
we continue to believe that the U.S. economy still has good growth to come and
that the stock market should reflect that growth. We do also believe that the
risk of a downturn in the stock market is greater than it has been if inflation
rises, pension plans turn their focus away from stocks and interest rates
reverse their long-term trend.
Corporate governance has become a major focus of the regulatory authorities
(primarily the Securities and Exchange Commission) and the Investment
Company Institute as well. One of the major proposals is a requirement that
investment company Boards of Directors consist of at least two-thirds
independent directors (directors who are otherwise unaffiliated with
management). The current requirement has been only 40 per cent. Ellsworth
has consistently had two-thirds or more of its directors unaffiliated with
management throughout its history. The current make up of the Board is
seven independent directors and two inside directors. All of us at Ellsworth
have believed since the Fund's founding that this is the most appropriate way
to govern an investment company.
In its October 1999 edition of the Principia Pro for Closed-End Funds,
Morningstar* continued to rate Ellsworth at four stars (above average).
Shareholders who wish a copy of this report should contact us.
At its October meeting the Board of Directors declared a dividend totaling
$1.29 per share. This dividend consists of 5.8 cents per share from
undistributed net investment income, 25.6 cents per share from net short-term
capital gains and 97.6 cents per share from net long-term gain on investments
realized in the fiscal year 1999. This dividend will be payable on November
29, 1999 to shareholders of record on October 29, 1999.
The 2000 annual meeting of shareholders will be held in Bonita Bay, Florida
on January 21, 2000. Particulars will be included in the Proxy statement. All
shareholders are welcome to attend and we hope to see you there.
/s/ Thomas H. Dinsmore
Chairman of the Board
November 5, 1999
* Morningstar is a mutual fund analysis and statistical reporting service that
reports on and rates most mutual funds.
See Important Factors Regarding Forward-Looking Statements on page 14 of
this report.
<PAGE> 4
LARGEST INVESTMENT HOLDINGS by underlying common stock
<TABLE>
<CAPTION>
Principal
Amount Value % Total
or Shares (Note 1) Net Assets
- --------- ---------- ----------
<S> <C> <C> <C>
1,000,000 Lucent Technologies, Inc.....................................$3,285,000 3.4
Designer, developer and manufacturer of communications
systems, software and products.
(exchangeable from NatWest Markets 0% due 2003)
3,000,000 Cable and Wireless Communications plc........................ 3,153,750 3.3
An integrated telecommunications company operating
throughout the United Kingdom, as well as a provider of
television and Internet services.
(exchangeable from Bell Atlantic Financial 4 1/4% due 2005)
2,013,000 Time Warner, Inc............................................. 3,126,000 3.3
A media company with operations in entertainment, cable
networks and publishing.
(exchangeable from Houston Industries 7% due 2000 and
Merrill Lynch 0.25% due 2004)
3,000,000 Telecom Corp. of New Zealand................................. 3,035,625 3.2
The principal supplier of telecommunications in New Zealand
(exchangeable from Bell Atlantic Financial 5 3/4% due 2003)
2,200,000 General Electric Corp........................................ 2,428,000 2.5
Develops and manufactures products for the utilization of
electricity. GE also offers financial services through GE Capital
Services, Inc. and owns the National Broadcasting Company.
(exchangeable from CS First Boston, Inc. 2 1/4% due 2003 and
Exch. Certificate 1 1/4% due 2004)
1,750,000 AES Corp..................................................... 2,248,750 2.3
Owns or has an interest in ninety-four power facilities
throughout the world.
1,500,000 Clear Channel Communications, Inc............................ 2,098,125 2.2
A diversified media company with operations in broadcasting
and outdoor advertising.
196,469 Amgen, Inc................................................... 2,026,082 2.1
Develops, manufactures and markets human therapeutics,
concentrating mainly on the areas of hematology, cancer and
infectious disease.
(exchangeable from TARGETS Trust IV notes)
20,600 BankAmerica Corp............................................. 1,884,900 2.0
Provides retail banking and financial services throughout
the United States.
(exchangeable from Jefferson-Pilot 7 1/4% due 2000)
2,000,000 Penn Treaty American Corp.................................... 1,857,500 1.9
Underwrites, markets and sells various insurance products,
which principally cover long-term nursing home care and
home health care.
Total $25,143,732 26.2
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
MAJOR INDUSTRY EXPOSURE
% Total
Net Assets
----------
<S> <C>
Telecommunications.................................. 12.34%
Energy.............................................. 11.34
Technology.......................................... 11.19
Health Care & Drugs................................. 10.89
Entertainment....................................... 8.94
Banking............................................. 7.22
Retail.............................................. 6.80
Financial & Insurance............................... 4.81
Cable............................................... 4.49
Data-Processing Services............................ 2.93
----------
Total 80.95%
</TABLE>
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
MAJOR PORTFOLIO CHANGES by underlying common stock
Three months ended September 30, 1999
Principal
Amount
or Shares
---------
<S> <C>
ADDITIONS
Amgen, Inc.
(exchangeable from TARGETS Trust IV)................ 196,469
AT&T Corp.
(exchangeable from UBS AG).......................... 1,250,000
Cable and Wireless Communications plc
(exchangeable from Bell Atlantic Financial)......... 2,000,000
Caremark Rx, Inc.
(exchangeable from Caremark Rx Capital Trust)....... 20,000
CMS Energy Corp...................................... 25,000
The Coastal Corp..................................... 40,000
Cox Communications, Inc.............................. 20,000
Devon Energy Corp.
(exchangeable from Kerr-McGee Corp.)................ 45,000
Enron Corp........................................... 45,000
Georgia-Pacific Corp................................. 20,000
Level 3 Communications, Inc.......................... 1,500,000
Siebel Systems, Inc.................................. 1,000,000
REDUCTIONS
Alpharma, Inc........................................ 1,000,000
Boeing Company....................................... 44,632
Fleetwood Capital Trust.............................. 40,000
HealthSouth Corp..................................... 1,250,000
Home Depot, Inc...................................... 1,000,000
Human Genome Sciences, Inc........................... 1,000,000
Merck & Co., Inc.
(exchangeable from Republic National Bank of NY).... 1,000,000
Morgan Stanley Dean Witter technology note
(CSCO, EDS, HWP, INTC, MSFT & ORCL)................. 1,000,000
News Corp............................................ 10,000
NTL Communications Corp.............................. 1,250,000
Minnesota Mining and Manufacturing
(exchangeable from CS First Boston, Inc............. 1,000,000
</TABLE>
<PAGE> 6
PORTFOLIO OF INVESTMENTS September 30, 1999
<TABLE>
<CAPTION>
Principal
Amount Identified Value
or Shares Cost (Note 1)
----------- ----------- -----------
<S> <C> <C> <C>
ADVERTISING--1.5%
$1,500,000 Interpublic Group Cos., Inc. 1.87% 2006 cv. sub. notes 144A (NR)..... $1,298,614 $1,391,250
----------- -----------
AEROSPACE--1.6%
350,000 Orbital Sciences Corp. 5% 2002 cv. sub. notes 144A (B3).............. 350,000 309,750
125,000 Orbital Sciences Corp. 5% 2002 cv. sub. notes (B3)................... 122,656 110,625
825,000 Simula, Inc. 8% 2004 sr. cv. sub. notes (NR)......................... 832,875 598,125
700,000 SPACEHAB, Inc. 8% 2007 cv. sub. notes 144A (NR)...................... 701,438 542,500
----------- -----------
2,006,969 1,561,000
----------- -----------
AUTOMOTIVE--0.7%
750,000 Standard Motor Products, Inc. 6 3/4% 2009 cv. sub. deb. (B1)......... 750,000 660,469
----------- -----------
BANKING--7.2%
50,000shs CNB Capital Trust I 6% SPuRS (Baa2)
(exch. for CNB Bancshares, Inc. common stock)....................... 1,253,063 1,462,500
40,000shs National Australia Bank Ltd. 7 7/8% exch. capital units (A1)......... 1,038,700 1,095,000
40,000shs WBK Trust 10% STRYPES * (NR)
(exch. for Westpac Banking Corp., Ltd. common stock)................ 1,065,785 1,180,000
1,665,000 BankAtlantic Bancorp 5 5/8% 2007 cv. sub. deb. (NR).................. 1,898,625 1,307,025
20,600 Jefferson-Pilot Corp. 7 1/4% 2000 ACES-a * (A1)
(exch. for BankAmerica Corp. common stock).......................... 1,853,661 1,884,900
----------- -----------
7,109,834 6,929,425
----------- -----------
CABLE--4.5%
20,000shs Cox Communications, Inc. 7% FELINE PRIDES * (Baa2)................... 1,000,000 1,155,000
1,000,000 Bell Atlantic Financial Services, Inc. 4 1/4% 2005 sr. exch. notes
144A (A1) (exch. for cash equiv. of Cable & Wireless
Communications plc common stock).................................... 1,022,755 1,051,250
2,000,000 Bell Atlantic Financial Services, Inc. 4 1/4% 2005 euro. sr. exch.
notes (A1) (exch. for cash equiv. of Cable & Wireless
Communications plc common stock).................................... 2,230,554 2,102,500
----------- -----------
4,253,309 4,308,750
----------- -----------
CAPITAL GOODS--2.5%
1,700,000 CS First Boston, Inc. 2 1/4% 2003 sr. medium-term exch. notes (A1)
(exch. for General Electric Corp. common stock)..................... 1,700,000 1,959,250
500,000 Exchangeable Certificate Corp. 1 1/4% 2004 exch. notes 144A (AAA)
(exch. for General Electric Corp. common stock)..................... 482,242 468,750
----------- -----------
2,182,242 2,428,000
----------- -----------
CONSUMER GOODS--0.7%
17,500shs Newell Financial Trust I 5 1/4% QUIPS 144A (A3)
(conv. into Newell Rubbermaid, Inc. common stock)................... 878,750 708,750
----------- -----------
DATA-PROCESSING SERVICES--2.9%
1,100,000 American Express Credit Corp. 1 1/8% 2003 cash exch. notes (Aa3)..... 1,055,617 1,332,375
1,750,000 National Data Corp. 5% 2003 cv. sub. notes (Ba3)..................... 1,746,875 1,483,125
----------- -----------
2,802,492 2,815,500
----------- -----------
ELECTRIC UTILITIES--1.7%
20,000shs NiSource, Inc. PIES-b * (Baa1)....................................... 1,000,000 857,500
15,000shs Texas Utilities Co. 9 1/4% FELINE PRIDES * (Baa3).................... 772,163 739,688
----------- -----------
1,772,163 1,597,188
----------- -----------
ENERGY--11.3%
22,500shs Apache Corp. $2.015 dep. shs. repstg. series C ACES-b pfd.*(Baa2).... 720,750 900,000
25,000shs CMS Energy Corp. 8 3/4% adj. cv. trust securities * (NR)............. 1,037,500 914,063
40,000shs The Coastal Corp. 6 5/8% FELINE PRIDES * (Baa2)...................... 1,000,000 1,042,500
1,750,000 AES Corp. 4 1/2% 2005 cv. jr. sub. deb. (B1)......................... 1,750,000 2,248,750
500,000 Devon Energy Corp. 4.95% 2008 cv. sub. deb. (Baa2)...................
(conv. into Chevron Corp. common stock)............................. 499,375 498,438
</TABLE>
<PAGE> 7
PORTFOLIO OF INVESTMENTS September 30, 1999 (continued)
<TABLE>
<CAPTION>
Principal
Amount Identified Value
or Shares Cost (Note 1)
----------- ----------- -----------
<S> <C> <C> <C>
ENERGY--continued
$1,050,000 Diamond Offshore Drilling, Inc. 3 3/4% 2007 cv. sub. notes (Baa1).... $1,064,375 $1,103,813
45,000 Enron Corp. 7% 2002 exch. notes * (NR)............................... 1,001,250 1,004,063
45,000 Kerr-McGee Corp. 5 1/2% 2004 DECS * (Baa1)
(exch. for Devon Energy Corp. common stock)......................... 1,493,438 1,755,000
500,000 Loews Corp. 3 1/8% 2007 cv. sub. notes (A2)
(conv. into Diamond Offshore Drilling, Inc. common stock)........... 450,000 423,750
1,000,000 Swiss Life Financial Ltd. 2% 2005 GEMMS 144A (NR)
(exch. for Royal Dutch Petroleum common stock)...................... 1,024,309 997,500
----------- -----------
10,040,997 10,887,877
----------- -----------
ENTERTAINMENT--8.9%
13,000shs Houston Industries, Inc. 7% 2000 ACES-a * (Baa1)
(exch. for Time Warner, Inc. common stock).......................... 771,167 1,326,000
20,000shs UnitedGlobalCom dep. shs. repstg. 7% series C sr. cum. cv. pfd.
144A (NR)............................................................ 1,006,250 1,030,000
500,000 At Home Corp. 0.5246% 2018 cv. sub. deb. 144A (NR)................... 409,149 318,125
1,500,000 Clear Channel Communications, Inc. 2 5/8% 2003 sr. cv. notes (Baa3).. 1,500,000 2,098,125
1,000,000 Imax Corp. 5 3/4% 2003 cv. sub. notes 144A (B1)...................... 1,000,000 1,082,500
2,000,000 Merrill Lynch & Co., Inc. 0.25% 2006 series B medium-term notes
(A3)(exch. for Time Warner, Inc. common stock)...................... 2,000,000 1,800,000
20,000 The Seagram Co. Ltd. 7 1/2% 2002 adj. cv.-rate equity security
units* (Ba2)......................................................... 1,002,500 928,750
----------- -----------
7,689,066 8,583,500
----------- -----------
FINANCIAL & INSURANCE--4.8%
13,000shs American General Delaware, L.L.C. 6% cv. A MIPS (A2)................. 658,455 1,040,000
20,000shs Frontier Financing Trust 6 1/4% cv. trust originated pfd. 144A (Ba2)
(conv. into Frontier Insurance Group, Inc. common stock)............ 1,046,875 690,000
500,000 American International Group 2 1/4% 2004 cv. medium-term notes (Aaa). 500,000 653,750
1,375,000 Penn Treaty American Corp. 6 1/4% 2003 cv. sub. notes 144A (BB+)..... 1,406,875 1,277,031
625,000 Penn Treaty American Corp. 6 1/4% 2003 cv. sub. notes (BB+).......... 605,938 580,469
10,730 Southwest Securities Group, Inc. 5% 2004 DARTS * (NR)
(exch. for Knight/Trimark Group, Inc. Class A common stock)......... 608,257 380,915
----------- -----------
4,826,400 4,622,165
----------- -----------
FOODS--1.0%
20,000 Ralston Purina Co. 7% 2000 SAILS * (Baa1)
(exch. for Interstate Bakeries Corp. common stock).................. 1,242,263 940,000
----------- -----------
HEALTH CARE & DRUGS--10.9%
20,000shs Caremark Rx Capital Trust I 7% SPuRS (B-)
(exch. for Caremark Rx, Inc. common stock).......................... 1,000,000 908,750
2,000,000 The Bear Stearns Cos., Inc. 1% 2006 medium-term notes (A2)
(conv. into an index comprised of Merck & Co., Inc. and Pfizer, Inc.
common stocks)...................................................... 2,000,000 1,630,000
Elan Finance Corp. 0% 2018 LYON 144A (Baa3)
3,000,000 (exch. for ADR's representing Elan Corp., plc common stock)......... 1,620,580 1,711,875
Merrill Lynch & Co., Inc. 1% 2003 euro medium-term notes (Aa3)
900,000 (cv. into Novartis AG common stock)................................. 898,875 789,750
Roche Holdings, Inc. 0% 2010 LYON 144A (NR).......................... 1,316,667 1,503,125
2,500,000 Sepracor, Inc. 7% 2005 cv. sub. deb. 144A (CCC+)..................... 1,000,000 931,250
1,000,000 Swiss Life Financial Ltd. 2% 2003 GEMMS 144A (NR)
1,000,000 (exch. for Glaxo Wellcome plc common stock).......................... 1,038,474 957,500
TARGETS Trust IV exch. notes * (NR)
196,469 (exch. for Amgen, Inc. common stock)................................. 1,999,990 2,026,082
----------- -----------
10,874,586 10,458,332
----------- -----------
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS September 30, 1999 (continued)
Principal
Amount Identified Value
or Shares Cost (Note 1)
----------- ----------- -----------
<S> <C> <C> <C>
PAPER & PAPER PRODUCTS--0.9%
$20,000 Georgia-Pacific Corp. 7 1/2% 2002 PEPS * (Baa2)..................... $1,000,000 $885,000
----------- -----------
RETAIL--6.8%
32,500shs Dollar General Trust 8 1/2% STRYPES * (NR)
(conv. into Dollar General Corp. common stock)...................... 1,176,882 1,405,625
8,700shs Estee Lauder Trust 6 1/4% TRACES II * (NR)
(conv. into Estee Lauder Companies, Inc. common stock).............. 730,455 678,600
500,000 Amazon.com, Inc. 4 3/4% 2009 cv. sub. notes 144A (Caa3).............. 500,000 586,250
1,000,000 Costco Companies, Inc. 0% 2017 cv. sub. notes 144A (A3).............. 549,614 866,250
1,000,000 Costco Companies, Inc. 0% 2017 cv. sub. notes (A3).................. 811,161 866,250
500,000 The Home Depot, Inc. 3 1/4% 2001 cv. sub. notes (A1)................. 503,125 1,487,813
1,000,000 Office Depot, Inc. 0% 2007 LYON (Baa2)............................... 658,363 638,750
----------- -----------
4,929,600 6,529,538
----------- -----------
STAFFING SERVICES--1.3%
1,500,000 Interim Services, Inc. 4 1/2% 2005 cv. sub. notes (Ba3).............. 1,422,500 1,191,563
----------- -----------
TECHNOLOGY--11.2%
7,500shs PSINet, Inc. 6 3/4% cv. pfd. C (Caa)................................. 375,000 301,875
1,000,000 Citrix Systems, Inc. 0% 2019 cv. sub. deb. 144A (NR)................. 365,615 482,500
1,500,000 CS First Boston, Inc. 1% 2006 medium-term exch. notes (AA)
(exch. for Microsoft Corp. common stock)............................ 1,500,000 1,455,000
1,500,000 Hewlett-Packard Co. 0% 2017 LYON 144A (Aa3).......................... 858,393 916,875
250,000 MindSpring Enterprises, Inc. 5% 2006 cv. sub. notes (B3)............. 250,000 232,969
1,000,000 NatWest Markets 0% 2003 exch. trust securities 144A + (NR)
(exch. for Lucent Technologies, Inc. common stock).................. 968,459 3,285,000
500,000 Sanmina Corp. 4 1/4% 2004 cv. sub. notes 144A (B+)................... 500,000 558,125
1,000,000 Siebel Systems, Inc. 5 1/2% 2006 cv. sub. notes 144A (NR)............ 1,002,813 980,000
750,000 STMicroelectronics, N.V. 0% 2009 LYON (BBB2)......................... 589,826 600,000
11,000 Times Mirror Company 4 1/4% 2001 PEPS * (A1)
(exch. for America Online, Inc. common stock)....................... 393,910 911,625
1,000,000 VLSI Technology, Inc. 8 1/4% 2005 cv. sub. notes (NR)................ 1,012,750 1,026,250
----------- -----------
7,816,766 10,750,219
----------- -----------
TELECOMMUNICATIONS--12.3%
20,000shs Globalstar Communications, Ltd. 8% cv. pfd. 144A (Caa)............... 1,000,000 1,135,000
3,000,000 Bell Atlantic Financial Services, Inc. 5 3/4% 2003 sr. exch. notes
144A (A1)(exch. for cash equiv. Telecom Corp. of New Zealand common
stock).............................................................. 3,162,844 3,035,625
1,000,000 Exchangeable Certificate Corp. 0.25% 2006 exch. notes 144A
(AAA)(exch. for specific telephone and cable common stocks **)...... 1,000,000 986,250
1,500,000 Level 3 Communications, Inc. 6% 2009 cv. notes (Caa1)................ 1,500,000 1,495,313
15,000 MediaOne Group, Inc. 6 1/4% 2001 PIES-a * (Ba1)
(exch. for ADR's representing Vodafone AirTouch plc common stock)... 871,875 1,574,063
1,000,000 Nextel Communications, Inc. 4 3/4% 2007 cv. sr. notes 144A (B2)...... 1,000,000 1,567,500
1,000,000 Telefonos De Mexico, S.A. 4 1/4% cv. sr. deb. (BB)................... 1,000,000 945,000
1,250,000 UBS AG 1 1/2% 2006 exch. notes (Aa1)
(exch. for AT&T Corp. common stock)................................. 1,250,000 1,109,375
----------- -----------
10,784,719 11,848,126
----------- -----------
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS September 30, 1999 (continued)
Principal Identified Value
Amount Cost (Note 1)
----------- ----------- -----------
<S> <C> <C> <C>
$17,000 U.S. TREASURY NOTES--0.0%
4 7/8% 3/31/01 ++ ................................................... $16,971 $16,830
----------- -----------
CORPORATE SHORT-TERM NOTES--1.5%
1,400,000 American Express Credit Corp. (P1)
(5.35% maturing 10/5/99)............................................. 1,398,960 1,398,960
----------- -----------
Total Convertible Bonds and Notes--73.4%............................. 66,166,446 70,542,631
Total Convertible Preferred Stocks--19.3%............................ 17,531,795 18,570,851
Total Corporate Short-Term Notes--1.5%............................... 1,398,960 1,398,960
----------- -----------
Total Investments--94.2%.............................................$85,097,201 90,512,442
=========== -----------
Other assets and liabilities, net--5.8%.............................. 5,527,579
-----------
Total Net Assets--100.0%............................................. $96,040,021
===========
</TABLE>
* See Note 1(e)
+ Guaranteed by National Westminster Bank plc
** Ticker symbols: CSCO, CMCSK, TWX, IBM, LMGa and WCOM
++ Collateral for a letter of credit
<TABLE>
<S> <C>
ACES-a Automatic Common Exchange Securities
ACES-b Automatically Convertible Equity Securities
ADR American Depositary Receipts
DARTS Derivative Adjustable Ratio Securities
DECS Debt Exchangeable for Common Stock
FELINE Family of Equity-Linked Income Securities
GEMMS Guaranteed Exchangeable Monetisation of Multiple Shares
LYON Liquid Yield Option Note
MIPS Monthly Income Preferred Securities
PEPS Premium Equity Participating Securities
PIES-a Premium Income Exchangeable Securities
PIES-b Premium Income Equity Securities
PRIDES Preferred Redeemable Increased Dividend Equity Securities
QUIPS Quarterly Income Preferred Securities
SAILS Stock Appreciation Income Linked Securities
SPuRS Shared Preference Redeemable Securities
STRYPES Structured Yield Product Exchangeable for Stock
TARGETS Targeted Growth Enhanced Terms Securities
TRACES Trust Automatic Common Exchange Securities
</TABLE>
Ratings in parentheses by Moody's Investors Service, Inc. or Standard & Poor's,
a division of McGraw-Hill Companies, Inc., have been obtained from sources
believed to be reliable but have not been audited by PricewaterhouseCoopers LLP.
The cost of investments for federal income tax purposes is $85,097,201 resulting
in gross unrealized appreciation and depreciation of $10,513,507 and $5,098,266,
respectively, or net unrealized appreciation of $5,415,241 on a tax cost basis.
See accompanying notes to financial statements
<PAGE> 10
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
------------------
<S> <C>
ASSETS:
Investments at value (cost $85,097,201) (Note 1)......... $90,512,442
Cash..................................................... 657,854
Receivable for securities sold........................... 4,780,122
Dividends and interest receivable........................ 621,092
Other assets............................................. 22,535
-----------
Total assets............................................. 96,594,045
-----------
LIABILITIES:
Payable for securities purchased......................... 502,538
Accrued management fee (Note 2).......................... 10,290
Accrued expenses ........................................ 41,196
-----------
Total liabilities ....................................... 554,024
-----------
NET ASSETS ................................................. $96,040,021
===========
NET ASSETS CONSIST OF:
Undistributed net investment income ..................... $ 490,195
Undistributed net realized gain from investment
transactions ......................................... 10,529,930
Unrealized appreciation on investments .................. 5,415,241
Capital shares (Note 3).................................. 85,508
Additional paid-in capital .............................. 79,519,147
-----------
NET ASSETS ................................................. $96,040,021
===========
Net asset value per share
($96,040,021 / 8,550,786 outstanding shares $ 11.23
===========
</TABLE>
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the Year Ended September 30, 1999
<S> <C>
INVESTMENT INCOME (NOTE 1):
Interest ................................................ $ 2,539,927
Dividends ............................................... 1,307,347
-----------
Total Income ......................................... 3,847,274
-----------
EXPENSES (NOTE 2):
Management fee .......................................... 714,357
Custodian ............................................... 35,777
Transfer agent .......................................... 30,567
Professional fees ....................................... 68,950
Directors' fees ......................................... 65,800
Reports to shareholders ................................. 43,631
Treasurer's office ...................................... 25,000
Other ................................................... 61,331
-----------
Total Expenses ....................................... 1,045,413
-----------
NET INVESTMENT INCOME ...................................... 2,801,861
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain from investment transactions .......... 10,525,513
Net increase in unrealized appreciation of investments .. 1,575,266
-----------
Net gain on investments ................................. 12,100,779
-----------
Net Increase in Net Assets Resulting from Operations .... $14,902,640
===========
</TABLE>
See accompanying notes to financial statements
<PAGE> 11
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended September 30, 1999 and 1998
1999 1998
------------ ------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ......................................... $ 2,801,861 $ 2,734,991
Net realized gain from investment transactions ................ 10,525,513 10,663,221
Net change in unrealized appreciation of investments .......... 1,575,266 (14,677,908)
------------ ------------
Net change in net assets resulting from operations ......... 14,902,640 (1,279,696)
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income ......................................... (2,684,269) (2,823,662)
Net realized gain on investments .............................. (10,656,426) (10,545,487)
------------ ------------
Total dividends ............................................ (13,340,695) (13,369,149)
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTE 3) ............................. 7,039,766 7,265,578
------------ ------------
CHANGE IN NET ASSETS ............................................ 8,601,711 (7,383,267)
Net assets at beginning of year ................................. 87,438,310 94,821,577
------------ ------------
NET ASSETS AT END OF YEAR (including undistributed net investment
income of $490,195 and $372,603, respectively)................... $ 96,040,021 $ 87,438,310
============ ============
</TABLE>
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Selected data for a share of common stock outstanding:
YEARS ENDED SEPTEMBER 30,
--------------------------------------------------------
Per Share Operating Performance: 1999 1998 1997 1996 1995 1994
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period . $11.18 $13.33 $11.80 $10.76 $ 9.72 $10.39
------ ------ ------ ------ ------ ------
Net investment income 0.33 0.35 0.40 0.43 0.48 0.51
Net realized and unrealized gain (loss) 1.40 (0.65) 2.59 1.37 1.30 (0.58)
------ ------ ------ ------ ------ ------
Total from investment operations ... 1.73 (0.30) 2.99 1.80 1.78 (0.07)
Less Distributions:
Dividends from net investment income . (0.32) (0.37) (0.40) (0.47) (0.51) (0.53)
Distributions from realized gains .... (1.36) (1.48) (1.06) (0.29) (0.23) (0.07)
------ ------ ------ ------ ------ ------
Total distributions ................ (1.68) (1.85) (1.46) (0.76) (0.74) (0.60)
------ ------ ------ ------ ------ ------
Net asset value, end of period ....... $11.23 $11.18 $13.33 $11.80 $10.76 $ 9.72
====== ====== ====== ====== ====== ======
Market value, end of period ......... $9.375 $10.00 $11.25 $9.875 $9.125 $8.375
Net assets, end of period ($000's) .. 96,040 87,438 94,822 78,395 69,769 61,316
Total Investment Return:
Based on net asset value* ......... 16.42% (2.39)% 27.77% 17.43% 19.50% (0.61)%
Based on market value+ 10.39% 5.21% 30.93% 17.13% 18.95% (4.46)%
Ratios/Supplemental Data:
Ratio of expenses to average
net assets ........................ 1.1% 1.1% 1.2% 1.2% 1.2% 1.1%
Ratio of net investment income to
average net assets ................ 3.0% 3.0% 3.4% 3.9% 5.0% 5.2%
Portfolio turnover rate ............. 67% 59% 71% 70% 44% 45%
</TABLE>
* Assumes valuation of the Fund's shares, and reinvestment of dividends,
at net asset values.
+ Assumes valuation of the Fund's shares at market price and reinvestment
of dividends at actual reinvestment price.
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies
Ellsworth Convertible Growth and Income Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a diversified, closed-end
management investment company. The preparation of financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements, and the reported
amounts of revenue and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation of
its financial statements:
(a) Security Valuation
Investments in securities traded on a national securities exchange are valued
at market using the last reported sales price. Securities traded in the over-
the-counter market and listed securities for which no sales were reported are
valued at the mean between closing reported bid and asked prices. Where no
closing prices are available, value is determined by management, with the
approval of the Board of Directors.
(b) Securities Transactions and Related Investment Income
Security transactions are accounted for on the trade date (date the order to
buy or sell is executed) with gain or loss on the sale of securities being
determined based upon identified cost. Dividend income is recorded on the ex-
dividend date and interest income is recorded on the accrual basis. Interest
of $17,234 was earned on cash balances held by the custodian of the Fund's
assets during the year ended September 30, 1999.
(c) Federal Income Taxes
It is the policy of the Fund to distribute substantially all of its taxable
income within the prescribed time and to otherwise comply with the provisions
of the Internal Revenue Code applicable to regulated investment companies.
Therefore, no provision for federal income or excise taxes is believed
necessary.
(d) Dividends and Distributions to Shareholders
The liability for dividends and distributions payable is recorded on the ex-
dividend date.
(e) Market Risk
It is the Fund's policy to invest the majority of its assets in convertible
securities. Although convertible securities do derive part of their value
from that of the securities into which they are convertible, they are not
considered derivative financial instruments. However, certain of the Fund's
investments include features which render them more sensitive to price
changes in their underlying securities. Thus they expose the Fund to greater
downside risk than traditional convertible securities, but still less than
that of the underlying common stock. The market value of those securities was
$22,489,374 at September 30, 1999, representing 23.4% of net assets.
2. Management Fee and Other Transactions with Affiliates
The management fee is paid to the investment adviser, Davis-Dinsmore
Management Company (the "Adviser"). The contract provides for payment of a
monthly advisory fee, 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 Fund's net
asset value in such month. The annual fee is subject to reduction to the
extent that the ordinary expenses of the Fund (excluding taxes and interest)
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 Fund for the year.
The Adviser furnishes investment advice, office equipment and facilities, and
pays the salaries of all executive officers of the Fund, except that the
costs associated with personnel and certain non-personnel expenses of the
office of the Treasurer up to a maximum of $25,000 a year are reimbursed by
the Fund. Such reimbursements amounted to $25,000 for the year ended
September 30, 1999. The officers of the Fund are also directors, officers or
employees of the Adviser, and are compensated by the Adviser.
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS (continued)
The Fund has adopted a Director deferred compensation arrangement, which
allows the Directors to defer the receipt of all or a portion of Director
Fees payable on or after October 31, 1998. The amount of these fees will
remain an asset of the Fund. The Fund will be obligated to pay these fees,
with interest, to the Directors who have elected to defer receipt of their
fees on a future date or dates specified by the Directors, or as determined
under the terms of the arrangement.
3. Portfolio Activity
At September 30, 1999 there were 8,550,786 shares of $.01 par value common
stock outstanding (20,000,000 shares authorized). During the year ended
September 30, 1999, 726,685 shares were issued in connection with reinvestment
of dividends from net investment income and capital gains, resulting in an
increase in paid-in capital of $7,039,766.
Purchases and sales of investments, exclusive of corporate short-term notes,
aggregated $60,329,985 and $61,759,058, respectively, for the year ended
September 30, 1999.
A distribution of $1.290 per share, derived from net investment income of
31.4 cents, and net realized gains on investments of 97.6 cents, was declared
on October 18, 1999, payable November 29, 1999 to shareholders of record at
the close of business October 29, 1999.
<PAGE> 14
To the Shareholders and Board of Directors of
Ellsworth Convertible Growth and Income Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of
operations and of changes in net assets, and the financial highlights,
present fairly, in all material respects, the financial position of Ellsworth
Convertible Growth and Income Fund, Inc. (the "Fund") at September 30, 1999,
the results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the six years in the period then ended, in conformity
with generally accepted accounting principles. These financial statements
and financial highlights (hereafter referred to as "financial statements")
are the responsibility of the Fund's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities owned at September 30,
1999 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
October 18, 1999
<PAGE> 15
MISCELLANEOUS NOTES
THE YEAR 2000 ISSUE
Background. Like other investment companies as well as financial and business
organizations around the world, the Fund could be adversely affected if the
computer systems and embedded technology used by the Adviser and other
service providers do not properly process and calculate date-related
information and data from and after January 1, 2000.
Programs and Systems. The Adviser assessed and tested its internal computer
programs and systems last year to ensure these programs and systems will be
Year 2000 compliant. The computers used for trading and pricing are Pentium
II desktop systems, certified to be Year 2000 compliant by the manufacturer,
Dell Computer. The vendors whose accounting software the Adviser uses,
Microsoft Corp. and Advent Software, have also supplied it with statements
certifying that their products are now compliant.
In its daily operations, the Adviser relies on electrical power and telephone
service to operate its copier, telefax and telephone systems. The power and
telephone providers have stated, on their respective websites, that their
mission-critical systems were compliant as of mid-1999. Based on statements
made by the Adviser's landlord, it is expected that access to the Adviser's
offices and the use of its facilities will continue without incident.
Second and Third Party Issues. The Bank of New York, the Fund's custodian,
transfer agent and registrar, has publicly announced (in a press release
dated January 11, 1999), that Year 2000 renovation and testing of mission-
critical systems was completed by December 31, 1998, in compliance with
requirements set forth by the Federal Financial Institutions Examination
Council. In addition, the Bank also has programs in place to monitor the
status of third party vendors and service providers.
Bloomberg, the Adviser's securities pricing service provider, has not
released to the public the audit results of its testing, due to the
proprietary nature of their systems.
The Adviser continues to receive updates from each of these and its other
outside vendors as they become available.
Investments. Since the Fund has investments in securities whose issuers may
be materially adversely impacted by the Year 2000 issue, the Fund could also
be adversely affected. For this reason, since 1998 the Adviser has been
reviewing public filings and web page disclosures of each issuer and
assessing each with respect to Year 2000 compliance. Some of the criteria the
Adviser looks at are: costs incurred and estimates of system repair and
replacement, whether or not there is a contingency plan prepared, and the
status of second and third party issues. The Adviser continues to monitor
these disclosures and uses them concurrently with its other methods of
evaluating a security's value as an investment vehicle.
The Fund has not incurred any costs to date in the matter of the Year 2000
problem, nor do we expect the Fund to have any in the future.
Most Reasonably Likely Worst Case Year 2000 Scenario for the Fund. Since the
Fund has investments in securities whose issuers may be materially adversely
impacted by the Year 2000 issue, the Fund could also be adversely affected.
The failure to correct a material Year 2000 problem is perhaps most likely to
occur with respect to the Bank of New York, the Fund's custodian, transfer
agent and registrar. Although the Bank has made assurances that mission-
critical systems are compliant as of 1998 year-end as stated previously, the
Bank cannot ensure that all the vendors it relies upon are also completely
compliant. The effects might include difficulty in the settlement of trades
in a timely manner and dividend distribution delays. There is also the
possibility that the Fund's fees to the Bank might be increased due to the
Bank's increased cost of doing business. For the Adviser the problems that
might be faced include the lack of telephone and power service needed to
perform daily pricing and trading.
<PAGE> 16
MISCELLANEOUS NOTES (continued)
THE YEAR 2000 ISSUE (continued)
Such failures and others could materially and adversely affect the Fund's
results of operations, liquidity and financial condition. Due to the general
uncertainty inherent in the Year 2000 problem, resulting in part from the
uncertainty of the Year 2000 readiness of third parties, the Fund is unable
to determine at this time whether the consequences of Year 2000 failures will
have a material impact on the Fund's results of operations, liquidity or
financial condition.
Contingency Plan. Based on the representations made by The Bank of New York,
the Fund has not made any contingency plans relating to the receipt of
services the Bank provides. The staff members who are responsible for pricing
the portfolio and trading own cellular telephones which would be used as
backup to contact brokers if the main telephone systems and the Bloomberg
pricing service were not available. The Adviser has purchased a laptop
computer and a small generator to charge both the cell phone and laptop
computer's batteries. The Adviser will bear the cost of this equipment and
intends to review these plans periodically and to update them as
circumstances change.
- -----------------------------------------------------------------------------
IMPORTANT FACTORS REGARDING FORWARD-LOOKING STATEMENTS
Information contained within the letter to Shareholders constitutes forward-
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Statements which reflect the intent, belief or
expectations of the Company and its management regarding the anticipated
effect of events, circumstances and trends should be considered forward-
looking statements. These forward-looking statements are not guarantees of
future performance and there are a number of meaningful factors which could
cause the Company's results to vary materially from those indicated by any
such statements. Factors which could cause actual results to differ from
expectations include, among others, changes in individuals' savings rates or
investment choices, an increase in interest rates, inflation or taxes,
changes to foreign and domestic markets and economies in general, changes to
the market for convertible securities or the inability of the Company's
service providers and the companies whose securities the Company buys to
resolve any Year 2000 issues.
- ----------------------------------------------------------------------------
AUTOMATIC DIVIDEND INVESTMENT AND CASH PAYMENT PLAN
Shareholders may participate in our reinvestment plan whereby all dividends
and distributions are automatically invested in additional Ellsworth shares
at the current market price or net asset value, whichever is lower (but not
less than 95% of market price). When the market price is lower, The Bank of
NY (The "Bank"), as your agent, will combine your dividends with those of
other Plan participants, and purchase shares in the market, thereby taking
advantage of the lower commissions on larger purchases. There is no other
charge for this service.
Plan participants may also voluntarily send cash payments of $100 to $10,000
per month to the Bank, to be
combined with other Plan monies, for purchase of additional Ellsworth shares
in the open market. You pay only a bank service charge of $1.25 per
transaction, plus your proportionate share of the brokerage commission. All
shares and fractional shares purchased will be held by the Bank in your
dividend reinvestment account.
At any time, you may instruct the Bank to sell all or any portion of your
account. Also, you may deposit with the Bank any Ellsworth stock certificates
you hold, for a one-time fee of $7.50.
All registered shareholders are eligible to join the Plan. If your shares are
held by a broker or other nominee, you should instruct the nominee to join
the Plan on your behalf. Some brokers may require that your shares be taken
out of the broker's "street name" and re-registered in your own name.
To join the Plan, fill out and mail the authorization form located on the
next page.
- --------------------------------------------------------------------
Pursuant to Section 23 of the Investment Company Act of 1940, notice
is hereby given that the Fund may in the future purchase shares of
Ellsworth Convertible Growth and Income Fund, Inc. Common Stock from
time to time, at such times, and in such amounts, as may be deemed
advantageous to the Fund. Nothing herein shall be considered a
commitment to purchase such shares.
<PAGE> 17
Ellsworth Convertible Growth and Income Fund, Inc.
Automatic Dividend Investment and Cash Payment Plan
Plan and Authorization Form
The Bank of New York
Dividend Reinvestment
P.O. Box 1958,
Newark, NJ 07101-9774
I own, registered in my name.................... shares of Common Stock
of Ellsworth Convertible Growth and Income Fund, Inc. (the "Company").
I wish to invest all the dividends and distributions paid by the
Company on my shares automatically in additional shares from the date hereof
until this arrangement is terminated as stated below. As a participant in
this plan (the "Plan"), I may also wish to purchase additional shares of the
Company through the Plan.
Authorization. You are authorized to act as my agent as follows:
A. Establish an Account in my name.
B. Take into my Account all dividends and distributions paid by the
Company on all its Common Stock held in my name now or in the future and on
all additional shares of the Company (including fractions) held by you in my
Account.
C. In connection with any fiscal year-end capital gains distribution,
take the distribution (and any dividends from net investment income payable
with the distribution) in Common Stock at market price or net asset value,
whichever is lower.
D. In connection with the Company's first three quarterly dividends in
each fiscal year from net investment income (and any other dividends or
distributions declared by the Company, other than those paid pursuant to
paragraph C), take the dividend or distribution in Common Stock at net asset
value if the net asset value as determined by the Company as of the close of
business on the last trading day preceding the date of payment is lower than
the closing market price of the Common Stock on the American Stock Exchange on
that trading day, plus brokerage commissions. If the market price of the Common
Stock is lower than its net asset value, take the dividend or distribution in
cash and add it to my Account.
E. As soon as practicable after each cash payment is made to my Account
in accordance with paragraph D above, use the funds in my Account to buy on
the American Stock Exchange as many additional full shares of the Company's
Common Stock (plus a fractional interest in one share computed to three decimal
places) as are available at prices which are less than net asset value. If,
before you have completed the purchase of all shares for the distribution at
prices less than net asset value, the market price equals or exceeds the net
asset value of such shares, then you shall pay the remaining proceeds of the
distribution to the Company and take the balance of the distribution in shares
of Common Stock at net asset value.
F. I understand that as a Plan participant I may also voluntarily
purchase additional shares through the Plan by delivering a check payable to
the Bank for at least $100, but not more than $10,000 in any month for
deposit into my Account. Within 30 days, the Bank will combine all similar
monies received and purchase Company shares in the open market. Checks drawn
on foreign banks are subject to collection and collection fees and will be
invested the next investment date after funds have been collected.
G. You may mingle the cash in my Account with similar funds of other
stockholders of the Company for whom you act as agent under the Plan. The
cost of the shares and any fractional interests you buy for my Account in
connection with a particular dividend, distribution or cash purchase shall be
determined by the average cost per share, including brokerage commission, of
all shares bought by you for all shareholders for whom you act under the Plan
in connection with that dividend, distribution or cash purchase.
H. Whenever you receive or purchase shares or fractional interests for
my Account, you will send me confirmation of the transaction as soon as
practicable. You will hold such shares and fractional interests as my agent
in your name or the name of your nominee. Do not send me stock certificates
for full shares until I so request in writing or until my Account is
terminated as stated below. You will vote any shares so held for me in
accordance with any proxy returned to the Company by me in respect of the
shares of which I am a record owner.
I. I may instruct you at any time to liquidate all or any portion of
the shares of the Company then held in my Account. I understand that the Bank
will combine all liquidation requests it receives from Plan
participants on a particular day and will then sell shares of the Company
that are subject to liquidation requests in the open market. The amount of
proceeds I receive shall be determined by the average sales price per share,
after deducting brokerage commissions, of all shares sold by you for all Plan
participants who have given you liquidation requests.
(over)
<PAGE> 18
J. I understand that there is presently no service charge for you
serving as my agent and maintaining my Account, except that my Account will
be charged a $1.25 service fee for each cash purchase transaction on my
behalf pursuant to paragraph F. You may, in addition, charge me for extra
services performed at my request. I further understand that the Company
reserves the right to amend the Plan in the future to impose an additional
service charge.
K. As a Plan participant I may deposit with the Bank Common Stock
certificates of the Company that I now hold, to be added to my Account. A
one-time fee of $7.50 is charged for this service.
L. You will be liable only for willful misconduct or gross negligence
in acting as my agent under the Plan.
Name and Address. My name as shown on my Common Stock certificate or
certificates (including all names if more than one) and my address, are as
follows:
Please Print:
NAME OR NAMES.............................................................
(print names exactly as on stock certificate)
NUMBER AND STREET.........................................................
CITY, STATE AND ZIP CODE..................................................
SOCIAL SECURITY NUMBER....................................................
Stock Certificates. I understand that if I hold more than one Common Stock
certificate registered in similar but not identical names or if more than one
address is shown for me on the Company's Common Stock records, all my shares
of Common Stock must be put into the same name and address if all of them are
to be covered by one Account. I understand that additional shares
subsequently acquired by me otherwise than through the Plan will be covered
by my Account if and when they are registered in the same name and address as
the shares in my Account.
Income Tax. I understand that participation in the Plan for automatic
investment of dividends and distributions and cash purchase of shares does
not relieve me of any income tax which may be payable by me on such dividends
and distributions and on expenses incurred by the Company on my behalf.
Amendments and Change of Agent. I understand that the company may amend the
terms of the Plan and reserves the right to change the agent which acts for
all participants in the Plan at any time by giving written notice thereof to
each participant at his address as shown on your records. Any such change
shall be effective as to all dividends and distributions payable to
shareholders of record on any date more than 30 days after mailing of such
notice and shall be effective 30 days after the mailing of such notice as to
cash purchases. Further, I understand that the Company in connection with any
dividend or distribution will change the price at which shares of its Common
Stock are issued to participants in the Plan if the net asset value of the
shares is less than 95% of the market price of such shares on the last
trading day preceding the payment date of any distribution of net investment
income or net capital gain, unless the Board obtains a legal opinion from
independent counsel that the purchase of shares at net asset value under
these circumstances will not have a material adverse effect upon the federal
income tax liability of the Company. The Board may not authorize issuance of
shares offered to Plan participants only, if such issuance is at a price less
than net asset value, without the prior specific approval of the Company's
stockholders or of the Securities and Exchange Commission.
Termination. I may terminate my Account at any time by delivering written
notice to you prior to the record date of any dividend or distribution
requesting either liquidation or a stock certificate. I understand that you
or the Company may terminate all authorizations for any reason at any time by
sending written notice addressed to participants at their address as shown on
your records, such termination to be effective as to all dividends and
distributions payable to stockholders of record on any date more than 30 days
after mailing of such notice and shall be effective 30 days after the mailing
of such notice as to cash purchases. Following the date of termination, you
shall send me at my address shown on your records either the proceeds of
liquidation, or a stock certificate or certificates for the full shares held
by you in my Account and a check for the value of any fractional interest in
my Account based on the market price of the Company's Common Stock on that
date.
Signature(s)..................................... Date......................
(if shares are in more than one name, all must sign.)
.....................................
(over)
<PAGE> 19
BOARD OF DIRECTORS
GORDON F. AHALT Petroleum Consultant
WILLIAM A. BENTON Retired Stock Exchange Specialist
ELIZABETH C. BOGAN Senior Lecturer in Economics at
Princeton University
THOMAS H. DINSMORE, C.F.A. Chairman of the Board of Ellsworth
DONALD M. HALSTED, JR. Investor
GEORGE R. LIEBERMAN Retired Advertising Executive
DUNCAN O. MCKEE Retired Attorney
JANE D. O'KEEFFE President of Ellsworth
NICOLAS W. PLATT Public Relations Executive
OFFICERS
THOMAS H. DINSMORE Chairman of the Board
JANE D. O'KEEFFE President
SIGMUND LEVINE Senior Vice President and Secretary
H. TUCKER LAKE Vice President, Trading
GERMAINE M. ORTIZ Assistant Vice President
GARY I. LEVINE Treasurer and Assistant Secretary
MERCEDES A. PIERRE Assistant Treasurer
- --------------------------------------------------------------------
Investment Advisor
Davis-Dinsmore Management Company
65 Madison Avenue, Morristown, NJ 07960-7308
(973) 631-1177
http://www.bcvecf.com
email: [email protected]
Shareholder Services and Transfer Agent
The Bank of New York
Shareholder Relations Department-11E
P.O Box 11258, Church Street Station
New York, NY 10286-1258
(800) 432-8224
http://stkxfer.bankofny.com
Common Stock Listing
American Stock Exchange Symbol: ECF
ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND, INC.
65 MADISON AVENUE
MORRISTOWN, NEW JERSEY 07960
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