SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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 ss.240.14a-11(c) or ss.240.14a-12
________________________________________________________________________________
Bancroft Convertible Fund, Inc.
(Name of Person(s) Filing Proxy Statement)
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 No. ______________________________________
3) Filing party: ___________________________________________________________
<PAGE>
BANCROFT CONVERTIBLE FUND, INC.
65 Madison Avenue, Morristown, New Jersey 07960
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held February 23, 1998
----------
To The Stockholders:
The annual meeting of stockholders of Bancroft Convertible Fund, Inc. (the
"Company") will be held on Monday, February 23, 1998 at 12:00 noon at the
offices of the Company, 65 Madison Avenue, Suite 550, Morristown, New Jersey
07960 for the following purposes:
(1) To elect three directors to serve until the annual meeting of
stockholders in 2001, or until their successors are elected and qualified.
(2) To ratify or reject the selection of Coopers & Lybrand L.L.P. as
independent accountants for the fiscal year ending October 31, 1998.
(3) To approve or disapprove the elimination of the fundamental
investment policy of the Company that prohibits investments in other
investment companies.
(4) To transact such other business as may properly come before the
meeting.
Stockholders of record at the close of business on December 26, 1997 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 30, 1997
Thomas H. Dinsmore
Chairman of the Board of Directors
<PAGE>
BANCROFT CONVERTIBLE FUND, INC.
65 Madison Avenue, Morristown, New Jersey 07960
----------
PROXY STATEMENT
----------
Annual Meeting of Stockholders
To Be Held February 23, 1998
----------
The accompanying proxy is solicited by the Board of Directors of Bancroft
Convertible Fund, Inc. (the "Company"), in connection with the annual meeting of
stockholders of the Company to be held at the offices of the Company, 65 Madison
Avenue, Suite 550, Morristown, New Jersey 07960 at 12:00 noon local time on
February 23, 1998 (the "Annual Meeting"). A stockholder can revoke the proxy
prior to its use by appearing at the 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. It is expected that the Company's Annual
Report and this proxy statement and accompanying proxy will be first sent to
stockholders on or about December 30, 1997.
The Company has engaged the services of Corporate Investor Communications
("CIC") to assist it in the solicitation of proxies for the Annual Meeting. The
cost of soliciting proxies will be borne by the Company. It is estimated that
the cost of CIC's services will be approximately $5,000. The Company or CIC may
solicit proxies by telephone, telegraph or personal interview. 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," for the ratification of the selection
of Coopers & Lybrand L.L.P. as independent accountants for the fiscal year
ending October 31, 1998, and for the proposal to eliminate the Company's
fundamental investment policy that prohibits investment in other investment
companies. Abstentions and broker non-votes received 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 a proposal that
requires the vote of a majority or other percentage of the shares present at the
Annual 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 to adjourn the Annual Meeting to permit further solicitation
of proxies. Any such adjournment will require the affirmative vote of a majority
of the shares present in person or by proxy at the Annual Meeting. The proxies
will vote in favor of 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 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. Stockholders will be notified of any adjournment that is
later than March 25, 1998.
1
<PAGE>
Stockholders of record at the close of business on December 26, 1997 (the
"Record Date") will be entitled to one vote per share on all business of the
Annual Meeting. The Company had 3,156,263 shares of its Common Stock outstanding
on the Record Date.
PROPOSAL 1--
ELECTION OF DIRECTORS
The Company's amended Certificate of Incorporation 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 is currently fixed at
nine, with each of the three classes having three directors. At each annual
meeting of stockholders, 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 on February 23,
1998, the Board of Directors has approved the nomination of Gordon F. Ahalt,
Jane D. O'Keeffe and Nicolas W. Platt to serve as directors until the annual
meeting of stockholders to be held in 2001. All nominees are currently directors
of the Company. 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.
Cumulative voting in the election of directors is not permitted.
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. All
nominees have indicated that they are willing to serve as directors. If any 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.
Information regarding each nominee for director is provided below:
<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 2001
Jane D. O'Keeffe* 42 (1) Since August 1996, President November 18, 1995
of the Company, Ellsworth
Convertible Growth and Income
Fund, Inc. ("Ellsworth"), and
Davis-Dinsmore Management
Company ("Davis-Dinsmore").
From February 1996 to August
1996, Executive Vice President
of the Company. From January
1996 to August 1996, Executive
Vice President of Ellsworth.
From April 1994 to February
1996, Vice President of the
Company. From April 1994 to
January 1996, Vice President
of Ellsworth. From April 1994
to August 1996, Executive Vice
President of Davis- Dinsmore.
From October 1988 to March
1994, Vice President,
Fiduciary Trust International.
(2) Director of Ellsworth.
</TABLE>
- ------
*Ms. O'Keeffe is an "interested person" of the Company and Davis-Dinsmore, as
defined by the Investment Company Act of 1940, as amended (the "Investment
Company Act"), 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").
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>
Gordon F. Ahalt 69 (1) Since January 1982, President, April 19, 1982
G.F.A. Inc. (petroleum
industry consulting). Since
1987, Consultant, W.H. Reaves
& Co., Inc. (asset
management).
(2) Director of Ellsworth, The
Harbinger Group (investments),
Cal Dive International (diving
service) and the Houston
Exploration Company, Inc.
(petroleum exploration and
production).
Nicolas W. Platt 44 (1) Since January 1997, Managing April 28, 1997
Director of the Corporate
Practice, Burson Marsteller
(public relations). From
August 1995 to January 1997,
Senior Managing Director,
Bozell-Sawyer Miller (public
relations). From August 1993
to August 1995, Executive
Vice-President, Novatel
Communications Ltd. From April
1983 to August 1993, Managing
Director and Corporate Vice
President, American Stock
Exchange.
(2) Director of Ellsworth.
</TABLE>
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 2000
William A. Benton 64 (1) Since January 1991, limited February 17, 1994
partner of Gavin, Benton & Co.
(New York Stock Exchange
specialist firm), and Partner
in BE Partners (small options
market maker).
(2) Director of Ellsworth.
Elizabeth C. Bogan, 53 (1) Since September 1992, Senior April 1, 1990
Ph.D. Lecturer in Economics at
Princeton University. From
September 1971 to July 1992,
Professor of Economics at
Fairleigh Dickinson
University.
(2) Director of Ellsworth.
George R. Lieberman 75 (1) Retired. Prior to January July 1, 1987
1988, Chief Executive Officer,
Lieberman-Appalucci
(advertising); and President,
Interspace Airport Advertising
(advertising).
(2) Director of Ellsworth.
Terms Expiring in 1999
Thomas H. Dinsmore* 44 (1) Since August 1996, Chairman November 21, 1985
and Chief Executive Officer of
the Company, Ellsworth, and
Davis-Dinsmore. From November
1985 to August 1996, President
of the Company. From May 1986
to August 1996, President of
Ellsworth. Since April 1994,
Director of Davis-Dinsmore.
From August 1988 to August
1996, President of
Davis-Dinsmore. Since February
1983, Senior Analyst of
Davis-Dinsmore.
(2) Director of Ellsworth.
</TABLE>
3
<PAGE>
<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>
Donald M. Halsted, Jr. 70 (1) Since October 1983, self- December 18, 1970
employed businessman.
(2) Director of Ellsworth and
Aquarion Company (water company).
Duncan O. McKee 66 (1) Retired. From April 1988 to November 25, 1996
November 1996, Director
Emeritus of the Company and
Ellsworth. Prior to 1988,
Partner, Ballard Spahr Andrews
& Ingersoll (law firm).
(2) Director of Ellsworth.
</TABLE>
- ------
*Mr. 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 of Davis-Dinsmore.
----------
Directors of the Company, other than affiliated persons of the Company, as
a group received aggregate compensation of $56,850 from the Company during its
fiscal year ended October 31, 1997. 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 attended plus expenses of attending board meetings
and a fee of $100 per meeting of committees of the Board plus expenses for
attending 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 October 31, 1997 for each director of the Company:
Total Compensation
Aggregate Compensation From Company and
From Company Ellsworth(1)
------------ ------------
Gordon F. Ahalt .................... $ 8,500 $17,000
William A. Benton .................. $ 8,500 $17,200
Elizabeth C. Bogan, Ph.D ........... $ 8,700 $17,400
Thomas H. Dinsmore ................. $ -0- $ -0-
Donald M. Halsted, Jr .............. $ 8,700 $17,400
George R. Lieberman ................ $ 8,700 $17,200
Duncan O. McKee .................... $ 8,500 $17,000
Jane D. O'Keeffe ................... $ -0- $ -0-
Nicolas W. Platt(2) ................ $ 5,250 $ 9,500
- ----------
(1) Ellsworth is a closed-end investment company that is also advised by
Davis-Dinsmore.
(2) Mr. Platt received such fees for serving as Director of the Company and
Ellsworth since April 28, 1997.
During the fiscal year ended October 31, 1997, the Board of Directors held
six meetings. At present, the only committees of the Board are the audit
committee and the nominating committee. The functions of those committees, their
current members and the number of meetings held during the fiscal year ended
October 31, 1997 are set forth below. All of the incumbent directors attended
more than 75% of meetings of the Board and committee meetings held during such
fiscal year.
4
<PAGE>
Audit Committee. The Board of Directors has an audit committee currently
consisting of Messrs. Halsted, Jr. and Lieberman and Dr. Bogan. The audit
committee periodically meets 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 reviews the quality
and performance of the Company's accounting and financial staff. During the
fiscal year ended October 31, 1997, the audit committee met twice.
Nominating Committee. The Board of Directors has a nominating committee
currently consisting of Messrs. Halsted, Jr. and Lieberman. This committee was
created to recommend individuals for nomination for election at each annual
meeting of stockholders. The nominating committee considers and recommends
individuals for nomination as directors. The names of potential director
candidates are drawn from a number of sources, including recommendations from
members of the Board, management and stockholders. Stockholders wishing to
recommend Board nominees should submit their recommendations in writing to the
Secretary at the Company's executive offices, with the submitting stockholder's
name and address and pertinent information about the proposed nominee similar to
that set forth in this proxy statement for Board nominees, including current
principal occupation and employment, principal positions held during the last
five years and a list of all companies for which the individual serves as a
director. During the fiscal year ended October 31, 1997, the nominating
committee met once.
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 October 31, 1997, pursuant to such Investment Advisory
Agreement, the Company paid Davis-Dinsmore $653,420 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. 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
Senior Vice President and Secretary of Davis-Dinsmore. H. Tucker Lake, Vice
President of Davis-Dinsmore and Vice President, Trading of the Company, is the
first cousin of Thomas H. Dinsmore and Jane D. O'Keeffe. Gary Levine, Treasurer
and Assistant Secretary of the Company and of Davis-Dinsmore, is the son of
Sigmund Levine.
5
<PAGE>
PROPOSAL 2 --
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 L.L.P. as independent accountants to examine and verify the accounts and
securities of the Company for its fiscal year ending October 31, 1998, and to
report thereon to the Board and the stockholders. This selection will be
submitted for ratification or rejection at the Annual Meeting. It is expected
that a representative of Coopers & Lybrand L.L.P. will be present at the Annual
Meeting to respond to appropriate questions of shareholders and to make such
statement as may be desired.
The affirmative vote of a majority of the votes cast is necessary to ratify
the selection of Coopers & Lybrand L.L.P. as independent accountants for the
Company.
The Board of Directors recommends that you vote FOR ratification of
selection of the accountants.
PROPOSAL 3--
ELIMINATION OF THE FUNDAMENTAL INVESTMENT POLICY
PROHIBITING INVESTMENTS IN OTHER INVESTMENT COMPANIES
Introduction. The Board of Directors of the Company proposes the
elimination of the fundamental investment policy that prohibits the Company from
investing in other investment companies. The specific changes proposed are
described below.
Current Policy. The Company's current fundamental investment policy
prohibiting investments in other investment companies states that the Company
may not:
purchase securities issued by other investment companies except in
connection with a merger, consolidation or acquisition.
This limitation is more restrictive than the Investment Company Act, which
generally prohibits investment companies from (i) owning more than 3% of the
total outstanding voting stock of any other investment company; (ii) investing
more than 5% of its total assets in the securities of any one other investment
company; and (iii) investing more than 10% of its total assets (in the
aggregate) in the securities of other investment companies.
Reasons for Proposed Change. The Company invests primarily in convertible
securities with the objectives of providing income and the potential for capital
appreciation (which objectives the Company considers to be relatively equal due
to the nature of the securities in which it invests). The market for and
features of convertible securities have changed dramatically in recent years.
Some new issues of convertible securities are structured as investment
companies. The Company's current fundamental investment policy prohibits the
Company from purchasing these types of issues. As a result, the Company may have
fewer investment options available to it and may be forced to acquire securities
that management believes are less attractive in terms of risk and return than
are newer types of instruments currently offered in the market. Accordingly, the
Board of Directors believes that the Company should have the ability to invest
in other investment companies to the extent permitted by the Investment Company
Act, which would give the Company greater flexibility to participate fully in
the convertible securities issues being offered in today's markets.
6
<PAGE>
By investing in other investment companies, the Company may have the
ability to invest in a wider range of issuers, industries and markets, thereby
seeking to decrease volatility and risk while at the same time providing greater
liquidity than the Company would have available to it investing in such
securities by itself. Investing in other investment companies may also allow the
Company to increase the efficiency of portfolio management by permitting the
Company's portfolio manager to concentrate on those investments that constitute
the bulk of the Company's assets and not spend a disproportionate amount of time
on specialized areas. Although the acquisition of shares of other investment
companies by the Company would cause the Company to bear indirectly its
proportionate share of the expenses (such as audit and custodial fees) incurred
by such investment companies, the Board of Directors of the Company and
Davis-Dinsmore believe that these indirect expenses will be offset by the
benefits to the Company of acquiring such shares.
If the proposed elimination of the Company's prohibition against investment
in other investment companies is approved, the Company may invest in other
investment companies only to the extent consistent with the limitations of the
Investment Company Act and the Company's existing investment objectives and
policies.
Required Vote. The favorable vote of the holders of a "majority of the
outstanding voting securities" of the Company, as defined in the Investment
Company Act is required to approve the proposal to eliminate the fundamental
investment policy prohibiting investments in other investment companies. The
Investment Company Act defines a "majority of the outstanding voting securities
of the Company to mean the lesser of (a) the vote of holders of 67% or more of
the shares of Common Stock of the Company present in person or by proxy at the
Annual Meeting, if the holders of more than 50% of the outstanding voting shares
of the Company are present in person or by proxy, or (b) the vote of the holders
of more than 50% of the outstanding Common Stock of the Company.
Recommendation. The Board of Directors of the Company recommends that you
vote FOR the proposal to eliminate the fundamental investment policy of the
Company that prohibits investments in other investment companies.
7
<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 44 1983 Chairman and Chief See page 3 of this proxy
Executive Officer statement.
Jane D. O'Keeffe 42 1994 President See page 2 of this proxy
statement.
Sigmund Levine 73 1982 Senior Vice President Since February 1996, Senior
and Secretary Vice President of the Company,
and since January 1996, Senior
Vice President of Ellsworth.
From April 1993 to February
1996, Executive Vice President,
and since November 1982,
Secretary of the Company and
of Davis-Dinsmore. From
November 1982 to April 1993,
Treasurer of the Company. From
November 1982 to September
1997, Treasurer of Davis-
Dinsmore. From April 1993 to
January 1996, Executive Vice
President, and since May 1986,
Secretary of Ellsworth. From
May 1986 to April 1993,
Treasurer of Ellsworth. Since
September 1997, Senior Vice
President of Davis-Dinsmore.
H. Tucker Lake 50 1994 Vice President, Since April 1994, Vice President,
Trading Trading of the Company and of
Ellsworth. Since September
1997, Vice President of Davis-
Dinmore. Prior to April 1994,
Sales Associate, Coldwell
Banker, Schlott Realtors.
Gary Levine 40 1993 Treasurer Since April 1993, Treasurer of
the Company and of Ellsworth.
Since June 1986, Assistant
Secretary of the Company and
Ellsworth. From April 1994 to
September 1997, Assistant
Treasurer of Davis-Dinsmore.
Since April 1994, Assistant
Secretary and since September
1997, Treasurer of Davis-
Dinsmore.
</TABLE>
8
<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:
Shares of
Company Owned
Beneficially
December 26,
1997*
------------------
Gordon F. Ahalt .......................................... 551
William A. Benton ........................................ 1,393
Elizabeth C. Bogan, Ph.D ................................. 1,000
Thomas H. Dinsmore ....................................... 5,029(1)
Donald M. Halsted, Jr .................................... 2,785
George R. Lieberman ...................................... 928
Jane D. O'Keeffe ......................................... 3,573
Duncan O. McKee .......................................... 1,031
Nicolas W. Platt ......................................... -0-
Sigmund Levine ........................................... 787
H. Tucker Lake ........................................... 173(2)
Gary I. Levine ........................................... 518
- ----------
* Represents for each director less than 1% of the outstanding shares of
Common Stock of the Company. As of December 26, 1997, directors and
officers of the Company beneficially owned in the aggregate 17,768 shares
of Common Stock of the Company representing approximately 0.6% 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) Includes 993 shares of Common Stock as to which Mr. Dinsmore possessed
shared investment and voting power and 2,028 shares of Common Stock as to
which Mr. Dinsmore possessed shared investment power. The number of shares
of Common Stock of the Company owned by Mr. Dinsmore does not include 1,579
shares owned by his wife, as to which shares Mr. Dinsmore disclaims
beneficial ownership.
(2) Includes 121 shares of Common Stock as to which Mr. Lake possessed shared
investment and voting power.
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, Ellsworth, and
Davis-Dinsmore, and Jane D. O'Keeffe, President of each of the Company,
Ellsworth, and Davis-Dinsmore. Mr. Finnican was a partner of Forum Capital
Markets, L.P. (the "Forum Group") a broker/dealer located at 53 Forest Avenue,
Old Greenwich, Connecticut until July 1997. While Mr. Finnican was a partner,
his ownership interest in the Forum Group equaled approximately 6%.
During the fiscal year ended October 31, 1997, the Company acquired
$2,250,000 of securities from the Forum Group in transactions in which the Forum
Group acted as principal.
9
<PAGE>
STOCKHOLDER PROPOSALS
To be considered for inclusion in the Company's proxy statement and proxy
for the 1999 annual meeting of stockholders, stockholder proposals must be
received no later than September 1, 1998.
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 30, 1997
10
<PAGE>
BANCROFT CONVERTIBLE FUND, INC.
Annual Meeting to be held February 23, 1998
This Proxy is being solicited on behalf of the Board of Directors
The undersigned appoints Thomas H. Dinsmore, Jane D. O'Keeffe and 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
stockholders of Bancroft Convertible Fund, Inc. (the "Company") at the offices
of the Company, 65 Madison Avenue, Suite 550, Morristown, New Jersey 07960 on
February 23, 1998 at 12:00 noon, 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 the directors listed, FOR the proposal to ratify the Board's selection
of accountants, and FOR the proposal to eliminate the fundamental investment
policy prohibiting investments in other investment companies.
PLEASE FILL IN, DATE AND SIGN THE PROXY ON THE OTHER SIDE
AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE
- --------------------------------------------------------------------------------
^ FOLD AND DETACH HERE^
<PAGE>
Please mark |X|
your votes as
indicated in
this example
The Board of Directors recommends voting "FOR" Proposal 2 and "FOR" Proposal 3.
<TABLE>
<S> <C>
1. Election as director of all nominees listed below for 2. Proposal to Ratify selection of
the terms specified in the proxy statement. accountants.
FOR all nominees listed WITHHOLD FOR AGAINST WITHHOLD
(except as marked to AUTHORITY |_| |_| |_|
the contrary in the to vote for all
space provided) nominees
|_| |_|
Board of Directors nominees: Gordon F. Ahalt, Jane D. O'Keeffe,
and Nicolas W. Platt.
(INSTRUCTION: To Withhold Authority to vote for any individual
nominee, write that nominee's name in the space provided below.
3. Proposal to eliminate the fundamental investment policy
prohibiting investments in other investment companies.
________________________________________________________________
FOR AGAINST WITHHOLD
|_| |_| |_|
</TABLE>
Signature(s) __________________________________________ Date ________________
* NOTE: Please sign as name appears hereon. Joint owners each sign. When
signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
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^ FOLD AND DETACH HERE ^
BANCROFT CONVERTIBLE FUND, INC.
YOUR VOTE IS IMPORTANT TO US, PLEASE FILL IN, DATE AND SIGN
YOUR PROXY AND RETURN IT PROMPTLY IN THE ACCOMPANYING
ENVELOPE PROVIDED FOR YOUR CONVENIENCE.
