CASTLE CONVERTIBLE FUND, INC.
75 Maiden Lane
New York, New York 10038
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders:
The 1996 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 10, 1996 at 11:00 A.M. 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, 1997.
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 28, 1996
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 29, 1996
New York, New York
PROXY STATEMENT
for
THE 1996 ANNUAL MEETING OF SHAREHOLDERS
of
CASTLE CONVERTIBLE FUND, INC.
To be held on December 10, 1996
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 11:00 A.M.on December 10, 1996 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 29, 1996. 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 semi-annual and annual reports 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 2,236,006 shares were
issued and outstanding as of the close of business on October 28, 1996, 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 28, 1996:
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 315,114 shs.** 14.09%
Officers as a Group
<F*> Included in this figure are 71,844 shares owned by Fred Alger &
Company, Incorporated, a wholly-owned subsidiary of Alger
Associates, Inc.
<F**> Included in this figure are 2,700 shares beneficially owned by Fred
M. Alger III, 1,441 shares beneficially owned by Lester L. Colbert,
Jr., 4,517 shares beneficially owned by Arthur M. Dubow, 300 shares
beneficially owned by John T. Sargent and 100 shares beneficially
owned by Nathan E. Saint-Amand, M.D. Also included are the 306,056
shares listed in the table above as being held by Alger Associates,
Inc., which may be deemed to be beneficially owned by Fred M. Alger
III and David D. Alger by virtue of their control of 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 $6.8 billion
of assets, including those of the Fund, under management as of September 30,
1996.
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: 61 Adviser, Alger, Alger Properties, Inc.
("Properties"), Alger Shareholder Services, Inc.
("Services"), Alger Life Insurance Agency, Inc.
("Agency"), the Fund, The Alger Fund, The Alger
American Fund, The Alger Retirement Fund, Spectra
Fund, Fred Alger International Advisory S.A.
("International"), The Alger American Asset
Growth Fund ("Asset Growth") and Analysts
Resources, Inc. ("ARI").
David D. Alger President and Director of Alger Associates, the
Age: 52 Adviser, Alger, Properties, Services, Agency, and
the Fund; President and Trustee of The Alger
Fund, The Alger American Fund, The Alger
Retirement Fund, and Spectra Fund; President and
Director of International; Executive Vice
President and Director of ARI.
Gregory S. Duch Executive Vice President, Treasurer and Director
Age: 45 of the Adviser and Properties; Executive Vice
President and Treasurer of Alger Associates,
Alger, Services, Agency and ARI; Treasurer of the
Fund, The Alger Fund, The Alger American Fund, The
Alger Retirement Fund and Spectra Fund; Treasurer and
Director of International.
Mary Marsden-Cochran Secretary of Alger Associates, the Adviser, Alger,
Age: 43 Properties, Services, Agency, ARI, the Fund, The
Alger Fund, The Alger American Fund, The Alger
Retirement Fund, International and Spectra Fund.
With the exception of Ms. Marsden-Cochran, all of the above have been
employed by the Adviser for more than the past five years and where noted,
the individuals have served as officers of the Fund, of Spectra Fund (and
its predecessor Spectra Fund, Inc.), of The Alger American Fund and of The
Alger Fund for at least five years; and as officers of The Alger Retirement
Fund since 1993. The business address of each of the foregoing is 75 Maiden
Lane, New York, New York 10038. Ms. Marsden-Cochran has been Secretary of
Alger Associates, the Adviser, Alger, Properties, Services, Agency, ARI, the
Fund, The Alger Fund, The Alger American Fund, The Alger Retirement Fund,
International and Spectra Fund since February, 1996. She was Associate
General Counsel and Vice President of Smith Barney Inc. from December 1994
through February 1996. From January 1994 through November 1994 she was a
Blue Sky Attorney for AMT Capital.
Mr. Fred M. Alger III owns approximately 42.2% of Alger Associates'
outstanding voting securities. Mr. David D. Alger owns approximately 21.2%
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 28, 1996 Outstanding
- -------------------------------------------------------------------------------------------------------
* Fred M. Alger III, 61 February 1974 308,756 Shs.** 13.81%
Chairman of the Boards of Alger Associates,
the Adviser, Alger, Properties, Services,
Agency, ARI, the Fund, The Alger Fund, The
Alger American Fund, The Alger Retirement Fund,
International, Asset Growth and Spectra Fund.
Formerly Chairman of the Boards and President
of Alger Associates, the Adviser, Alger,
Properties, Services, Agency, the Fund,
Spectra Fund, Inc., The Alger Fund, The
Alger American Fund and The Alger Retirement
Fund.
* David D. Alger, 52 February 1993 306,056 Shs.** 13.69%
President and Director of Alger Associates,
the Adviser, Alger, Properties, Services,
Agency, and the Fund; President and Trustee
of The Alger Fund, The Alger American Fund,
The Alger Retirement Fund, International 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 Retirement Fund.
Lester L. Colbert, Jr., 62 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, 63 February 1974 4,517 Shs. 0.20%
Director of Coolidge Investment Corporation;
Trustee of The Alger Fund, The Alger American
Fund, The Alger Retirement Fund and Spectra
Fund; formerly Chairman of the Board of
Institutional Shareholder Services, Inc;
formerly Director of Spectra Fund, Inc.;
formerly President of Fourth Estate, Inc.,
private investor since 1985.
Stephen E. O'Neil, 64 January 1973 0 Shs. 0.00%
Of Counsel to the law firm of Baker, Nelson,
Mishkin & Kohler; private investor since 1981;
Director of Nova Care, Inc. and Brown-Forman
Corporation; Trustee of The Alger Fund, The
Alger American Fund, The Alger Retirement Fund
and Spectra Fund; formerly President and Vice
Chairman of City Investing Company and
Director of Centerre Bancorporation; formerly
Director of Spectra Fund, Inc. and Syntro
Corporation.
Nathan Emile Saint-Amand, M.D., 58 September 1986 100 Shs. 0.00%
Medical doctor in private practice; Trustee
of The Alger Fund, The Alger American Fund,
The Alger Retirement Fund and Spectra Fund;
formerly Director of Spectra Fund, Inc.
John T. Sargent, 72 May 1986 300 Shs. 0.01%
Private investor since 1987; Director of
Atlantic Mutual Insurance Co., Trustee of
The Alger Fund, The Alger American Fund,
The Alger Retirement Fund and Spectra Fund;
formerly Director of Spectra Fund, Inc.,
and River Bank America
<F*> 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.
<F**> Includes 306,056 shares of the Fund beneficially owned by Alger
Associates, Inc. directly or through a wholly-owned subsidiary. Fred M.
Alger III and David D. Alger may be deemed beneficially to own such
shares by virtue of their control of Alger Associates, Inc.
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. During the fiscal year ended October 31, 1995, all such Directors
received an aggregate of $40,000 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, 1995.
COMPENSATION TABLE
Total Compensation Paid to Directors from
The Alger Retirement Fund,
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.
- ------------------------------------------------------------------------------------------------------------------
Lester L. Colbert, Jr., Director $8,000 $ 8,000
Arthur M. Dubow, Director $8,000 $28,250
Stephen E. O'Neil, Director $8,000 $28,250
Nathan E. Saint-Amand, Director $8,000 $28,250
John T. Sargent, Director $8,000 $28,250
There were four meetings of the Board of Directors held during the
fiscal year ended October 31, 1995. During that period each of the Directors
attended at least 75% of the meetings of the Board.
The Fund's Board of Directors has no auditing, nominating or
compensation committee or any committee performing similar functions.
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, 1997. 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 1997
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 29, 1996
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.
CASTLE CONVERTIBLE FUND, INC.
PROXY
ANNUAL MEETING OF SHAREHOLDERS DECEMBER 10, 1996
The undersigned shareholder of Castle Convertible Fund, Inc. hereby appoints
David D. Alger, Gregory S. Duch and Stephen E. O'Neil, and each of them, the
attorneys and proxies of the undersigned, with power of substitution, to
vote, as indicated herein, all of the shares of common stock of Castle
Convertible Fund, Inc. standing in the name of the undersigned at the close
of business on October 28, 1996, at the Annual Meeting of Shareholders of
the Fund to be held at the offices of the Fund, 75 Maiden Lane, New York,
New York 10038 at 11:00 A.M. on December 10, 1996, and at all adjournments
thereof, with all of the powers the undersigned would possess if then and
there personally present and especially (but without limiting the general
authorization and power hereby given) to vote as indicated on the proposals,
as more fully described in the Proxy Statement for the meeting, and to vote
and act on any other matter which may properly come before the meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS GIVEN BY THE SHAREHOLDERS, BUT IF NO
INSTRUCTIONS ARE GIVEN IT WILL BE VOTED FOR THE PROPOSALS LISTED.
(Continued and to be signed on the reverse side)
Please mark boxes [(colored in)] or [x] in blue or black ink.
1. ELECTION OF DIRECTORS FOR all nominees WITHHOLD AUTHORITY
listed below (except to vote for all
as marked to the nominees listed
contrary below) [ ] below [ ]
INSTRUCTIONS: To withhold authority to vote for any individual nominee
strike a line through the nominee's name in the list below.
Fred M. Alger III, David D. Alger, Lester L. Colbert, Jr., Arthur M. Dubow,
Stephen E. O'Neil, Nathan E. Saint-Amand, John T. Sargent
2. PROPOSAL TO RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP as independent
public accountants of the Fund.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. PROPOSAL TO CONSIDER AND ACT UPON such other matters as may properly come
before the meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY CARD PROMPTLY.
Signature(s) should be exactly as
name or names appear on this proxy.
If stock is held jointly, each holder
should sign. If signing is by
attorney, executor, administrator,
trustee or guardian, please give full
title.
-------------------------------------
Signature(s) Signature(s)
-------------------------------------
Dated Social Security or
Tax Identification
Number
This proxy, when dated and signed,
should be mailed promptly to Alger
Shareholder Services, Inc., 30
Montgomery Street, Jersey City, NJ
07302. No postage is required if
mailed in the United States in the
enclosed envelope.