CASTLE CONVERTIBLE FUND, INC.
75 Maiden Lane
New York, New York 10038
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders:
The 1995 Annual Meeting of Shareholders of Castle Convertible Fund,
Inc. (the "Fund") will be held in the offices of the Fund, 75 Maiden Lane,
New York, New York 10038, 12th Floor, on December 5, 1995 at 12:00 noon for
the following purposes:
1. To elect seven (7) Directors for the ensuing year.
2. To ratify or reject the selection of Arthur Andersen LLP as the
independent public accountants for the Fund for the fiscal year
ending October 31, 1996.
3. To consider and act upon such other matters as may properly come
before the meeting or any adjournments thereof.
Shareholders of record as of the close of business on October 23, 1995
will be entitled to vote at the meeting. The enclosed proxy is being
solicited on behalf of Management of the Fund.
IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY TO ALGER SHAREHOLDER
SERVICES, INC., 30 MONTGOMERY STREET, JERSEY CITY, NEW JERSEY 07302, IN THE
POSTPAID RETURN ENVELOPE ENCLOSED FOR YOUR USE.
By order of the Board of Directors
DAVID D. ALGER
President
Dated: October 24, 1995
New York, New York
PROXY STATEMENT
for
THE 1995 ANNUAL MEETING OF SHAREHOLDERS
of
CASTLE CONVERTIBLE FUND, INC.
To be held on December 5, 1995
INTRODUCTION
The accompanying Proxy is being solicited by the Management of Castle
Convertible Fund, Inc. (the "Fund") for use at the Annual Meeting of
Shareholders to be held at 12:00 noon on December 5, 1995 and at any
adjournments thereof. All costs of solicitation, including printing and
mailing of this Proxy Statement and the accompanying Notice of Meeting and
Proxy, the reimbursement of brokerage firms and others for their expenses in
forwarding solicitation material to the beneficial owners of stock, and
supplementary solicitations to submit proxies, which may be made by mail,
telephone, telegraph and personal interviews by officers of the Fund, will
be borne by the Fund. It is anticipated that the cost of such supplementary
solicitation, if any, will be nominal.
If the enclosed Proxy is properly executed and returned in time to be
voted at the meeting, the full and fractional shares represented thereby
(each full share is entitled to one vote and each fractional share is
entitled to proportionate voting rights) will be voted in accordance with
the instructions marked thereon. Unless instructions to the contrary are
marked thereon with respect to Proposals 1 and 2, the Proxy will be voted
FOR the proposals stated in the accompanying Notice of Meeting. All proxies
not voted, including broker non-votes, will not be counted toward
establishing a quorum. Shareholders should note that while votes to ABSTAIN
will count toward establishing a quorum, passage of any proposal being
considered at the meeting will occur only if a sufficient number of votes
are cast FOR the proposal. Accordingly, votes to ABSTAIN and votes AGAINST
will have the same effect in determining whether the proposal is approved.
On any motion for adjournment of the meeting, even if a quorum is present,
Management will vote all Proxies in its discretion pursuant to Item 3
thereof. Any shareholder giving a Proxy has the right to attend the meeting
to vote his shares in person (thereby revoking any prior Proxy) and also the
right to revoke the Proxy at any time by written notice received by the Fund
prior to its exercise.
This Proxy Statement is being mailed to shareholders on or about
October 24, 1995. The address of the principal executive office of the Fund
is 75 Maiden Lane, New York, New York 10038.
A copy of the Fund's most recent annual report and its subsequent
semi-annual report will be sent to you without charge upon written request
to the Fund, 75 Maiden Lane, New York, NY 10038 or by calling 800-223-3810
toll-free.
INFORMATION REGARDING VOTING SECURITIES
The Fund has only one class of shares, of which 2,236,003 shares were
issued and outstanding as of the close of business on October 23, 1995, the
record date for determining shareholders entitled to receive notice of, and
to vote at the meeting and all adjournments thereof. Each share is entitled
to one vote at the Annual Meeting.
The following table sets forth those persons known to the Fund to be
beneficial owners of more than 5% of the outstanding voting shares of the
Fund as of October 23, 1995:
Amount of
Title of Name and Address Beneficial Percent of
Class of Beneficial Owners Ownership Class
- - -------- -------------------- ---------- ----------
Common Stock Alger Associates, Inc. 306,056 shs.* 13.69%
75 Maiden Lane
New York City, NY 10038
Common Stock All Directors and 310,597 shs.** 13.89%
Officers as a Group
<FN>
<F1>* Included in this figure are 71,844 shares owned by Fred Alger &
Company, Incorporated, a wholly-owned subsidiary of Alger Associates, Inc.
<F2>** Included in this figure are 308,756 shares beneficially owned by Fred
M. Alger III, 1,441 shares beneficially owned by Lester L. Colbert, Jr.,
300 shares beneficially owned by John T. Sargent and 100 shares
beneficially owned by Nathan E. Saint-Amand, M.D. Included in the
308,756 shares beneficially owned by Mr. Alger are the 306,056 shares
listed in the table above as being held by Alger Associates, Inc.
INFORMATION REGARDING THE ADVISER
Fred Alger Management, Inc. (the "Adviser") has served as the
investment adviser to the Fund since February 1974. The Adviser is a wholly-
owned subsidiary of Fred Alger & Company, Incorporated ("Alger"). Alger,
which is a wholly-owned subsidiary of Alger Associates, Inc. ("Alger
Associates"), is a securities broker-dealer and member firm of the New York
Stock Exchange, Inc. The principal place of business of the Adviser and
Alger Associates is 75 Maiden Lane, New York, New York 10038. The principal
place of business of Alger is 30 Montgomery Street, Jersey City, New Jersey
07302. Alger Associates and Alger are Delaware corporations and the Adviser
is a New York corporation.
The Adviser has been engaged in the business of rendering investment
advisory services since 1964 and the Adviser had approximately $4.8 billion
of assets, including those of the Fund, under management as of September 30,
1995.
The names and principal occupations of the directors and principal
executive officers of the Adviser are as follows:
Name Principal Occupations
---- ---------------------
Fred M. Alger III Chairman of the Board of Alger Associates, the
Age: 60 Adviser,Alger, Alger Prop-erties, Inc. ("Properties"),
Alger Shareholder Services, Inc. ("Services"), Alger
Life Insurance Agency, Inc. ("Agency"), the Fund,
Spectra Fund, Inc., The Alger Fund, The Alger American
Fund, The Alger Defined Contribution Trust, Spectra
Fund and Analysts Resources, Inc. ("ARI").
David D. Alger President and Director of Alger Associates, the
Age: 51 Adviser, Alger, Properties, Services, Agency, the Fund
and Spectra Fund, Inc.; President and Trustee of The
Alger Fund, The Alger American Fund, The Alger Defined
Contribution Trust and Spectra Fund; Executive Vice
President and Director of ARI.
Gregory S. Duch Executive Vice President, Treasurer and Director of
Age: 44 the Adviser and Proper ties; Executive Vice President
and Treasurer of Alger Associates, Alger, Services,
Agency and ARI; Treasurer of the Fund, Spectra Fund,
Inc., The Alger Fund, The Alger American Fund, The
Alger Defined Contribution Trust and Spectra Fund.
Nanci K. Staple Secretary of Alger Associates, the Adviser, Alger,
Age: 51 Properties, Services, Agency, ARI, the Fund, Spectra
Fund, Inc., The Alger Fund, The Alger American Fund,
The Alger Defined Contribution Trust and Spectra Fund.
All of the above have been employed by the Adviser for more than the
past five years. Where noted, the individuals have served as officers of the
Fund, of Spectra Fund, Inc. of The Alger American Fund and of The Alger Fund
for at least five years; as officers of The Alger Defined Contribution Trust
since 1993; and as officers of Spectra Fund since 1995. The business address
of each of the foregoing is 75 Maiden Lane, New York, New York 10038.
Mr. Fred M. Alger III owns approximately 53.1% of Alger Associates'
voting securities and may be deemed to control Alger Associates, the Adviser
and Alger. Mr. David D. Alger owns approximately 17.2% of Alger Associates'
outstanding voting securities.
PROPOSAL NO. 1: ELECTION OF DIRECTORS
It is proposed to elect as directors the nominees shown below to serve
until the next annual meeting of shareholders and until their successors are
elected and qualified. The nominees have indicated an intention to serve if
elected and have consented to be named in this Proxy Statement.
Shares of the
Fund Beneficially
Owned Directly
Name, Age and Business Director of or Indirectly, Percent
Experience for the the Fund as of of Shares
Last Five Years Since October 23, 1995 Outstanding
---------------------- ----------- ----------------- -----------
* Fred M. Alger III, 60 February 1974 308,756 Shs.** 13.81%
Chairman of the Board of Alger
Associates, the Adviser, Alger,
Properties, Services, Agency, ARI,
the Fund, Spectra Fund, Inc., The
Alger Fund, The Alger American Fund,
The Alger Defined Contribution Trust
and Spectra Fund. Formerly Chairman
of the Board and President of Alger
Associates, the Adviser, Alger,
Properties, Services, Agency,
Spectra Fund, Inc., The Alger Fund,
The Alger American Fund and The
Alger Defined Contribution Trust;
Chairman of the Board of FAAMI and
ARI.
* David D. Alger, 51 February 1993 0 Shs. 0.00%
President and Director of Alger
Associates, the Adviser, Alger,
Properties, Services, Agency, the
Fund and Spectra Fund, Inc.;
President and Trustee of The Alger
Fund, The Alger American Fund, The
Alger Defined Contribution Trust and
Spectra Fund; Executive Vice
President and Director of ARI.
Formerly Executive Vice President
and Director of Alger Associates,
the Adviser, Alger, Properties,
Services, Agency, FAAMI and ARI;
Vice President and Director of
Spectra Fund, Inc.; Vice President
and Trustee of The Alger Fund, The
Alger American Fund and The Alger
Defined Contribution Trust.
Lester L. Colbert, Jr., 61 September 1974 1,441 Shs. 0.06%
Director of the Fund; private
investor since 1988. Formerly
Chairman of the Board, President and
Chief Executive Officer of Xidex
Corporation.
Arthur M. Dubow, 62 February 1974 4,000 Shs. 0.18%
President of Fourth Estate, Inc.;
private investor since 1985;
Director of Spectra Fund, Inc., the
Fund, The Beard Company and Coolidge
Investment Corporation; Trustee of
The Alger Fund, The Alger American
Fund, The Alger Defined Contribution
Trust and Spectra Fund. Formerly
Chairman of the Board of
Institutional Shareholder Services,
Inc.
Stephen E. O'Neil, 63 January 1973 0 Shs. 0.00%
Of Counsel to the law firm of Baker,
Nelson, Mishkin & Kohler; private
investor since 1981; Director of
Spectra Fund, Inc., the Fund,
NovaCare, Inc., Syntro Corporation
and Brown-Forman Corporation;
Trustee of The Alger Fund, The Alger
American Fund, The Alger Defined
Contribution Trust and Spectra Fund.
Formerly President and Vice Chairman
of City Investing Company and
Director of Centerre Bancorporation.
Nathan Emile Saint-Amand, M.D., 57 September 1986 100 Shs. 0.00%
Medical doctor in private practice;
Director of Spectra Fund, Inc. and
the Fund; Trustee of The Alger Fund,
The Alger American Fund, The Alger
Defined Contribution Trust and
Spectra Fund.
John T. Sargent, 71 May 1986 300 Shs. 0.01%
Private investor since 1987;
Director of River Bank America,
Atlantic Mutual Insurance Co.,
Spectra Fund, Inc. and the Fund;
Trustee of The Alger Fund, The Alger
American Fund, The Alger Defined
Contribution Trust and Spectra Fund.
<FN>
<F1>* Fred M. Alger III and David D. Alger may be considered "interested
persons" of the Fund as such term is defined in the Investment Company
Act of 1940 because they are "interested persons" of the Adviser and
officers of the Fund. Fred M. Alger III and David D. Alger are brothers.
<F2>** The 308,756 shares of the Fund listed as owned by Mr. Alger include
234,212 shares owned by Alger Associates, Inc. and 71,844 shares owned
by Fred Alger & Company, Incorporated, a wholly-owned subsidiary of
Alger Associates, Inc. in which Mr. Alger owns approximately 53.1% of
the voting securities.
Officers, Directors and Related Matters
No director, officer or employee of Alger Management or its affiliates
will receive any compensation from the Fund for serving as an officer or
Director of the Fund. Each Director of the Fund who is not an "interested
person" of the Fund as defined in the Investment Company Act of 1940
receives from the Fund a quarterly fee of $2,000 for his services as
Director, but such fee has been and will be reduced proportionately for each
meeting of the Board of Directors which such Director does not attend during
the quarter. During the fiscal year ended October 31, 1994, all such
Directors received an aggregate of $37,000 of such fees. The Fund has no
bonus, profit sharing, pension or retirement plans. The following table
provides compensation amounts paid to Disinterested Directors of the Fund
during the fiscal year ended October 31, 1994.
COMPENSATION TABLE
Total Compensation Paid to Directors from
The Alger Defined Contribution Trust,
Aggregate The Alger Fund,
Compensation The Alger American Fund,
from Castle Convertible Fund, Inc. and
Name of Person, Position Castle Convertible Fund, Inc. Spectra Fund, Inc.
------------------------ ----------------------------- -----------------------------------------
Lester L. Colbert, Jr., Director $5,000 $ 5,000
Arthur M. Dubow, Director $8,000 $28,130
Stephen E. O'Neil, Director $8,000 $28,130
Nathan E. Saint-Amand, Director $8,000 $28,130
John T. Sargent, Director $8,000 $28,130
There were five meetings of the Board of Directors held during the
last fiscal year. All of the Directors except Mr. Colbert attended at least
75% of the meetings held during their terms of office.
The Fund's Board of Directors has no nominating or compensation
committee or any committee performing similar functions. The Board of
Directors has an audit committee consisting of Stephen E. O'Neil, John T.
Sargent and Arthur M. Dubow.
Management recommends that shareholders vote FOR Proposal No. 1.
PROPOSAL NO. 2: RATIFICATION OF THE SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, including a majority of the Directors who are
not "interested persons" of the Fund or the Adviser have selected and
approved Arthur Andersen LLP as the independent public accountants to
examine the financial statements of the Fund for the fiscal year ending
October 31, 1996. The Fund has been advised that no member of such firm has
a material direct or indirect interest in the Fund. Pursuant to Section
32(a) of the Investment Company Act of 1940, such selection is subject to
ratification or rejection by shareholders of the Fund. A representative of
Arthur Andersen LLP is expected to be present at the meeting to answer any
questions which the Fund's shareholders may have. The representative will
have an opportunity to make a statement if he so desires.
Management recommends that shareholders vote FOR Proposal No. 2.
LITIGATION
The Fund is not a party to any material litigation.
OTHER MATTERS
Management knows of no other matters to be brought before the meeting;
however, if any other matters come before the meeting, the persons named in
the enclosed Proxy will vote proxies that do not contain specific
restrictions in accordance with their best judgment on such matters.
SHAREHOLDERS' PROPOSALS
A shareholder proposal intended to be presented at the Fund's 1996
Annual Meeting of Shareholders must be received by the Fund a reasonable
time before the solicitation is made in order to be included in the Fund's
proxy statement and form of proxy relating to that meeting.
75 Maiden Lane
New York, New York
Dated: October 24, 1995
If you cannot attend the meeting, you are urged to fill in, sign and
date the enclosed Proxy and return it as promptly as possible. An addressed
envelope is enclosed for your convenience.