SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Soliciting Material Under Rule
[_] Confidential, For Use of the 14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[X] Definitive Additional Materials
Castle Convertible Fund Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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 Statement No.:
________________________________________________________________________________
3) Filing Party:
________________________________________________________________________________
4) Date Filed:
________________________________________________________________________________
CASTLE CONVERTIBLE FUND, INC.
111 FIFTH AVENUE
NEW YORK, NY 10003
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS:
The 2005 Annual Meeting of Shareholders of Castle Convertible Fund, Inc.
(the "Fund") will be held in the offices of the Fund, 111 Fifth Avenue, 2nd
Floor, New York, NY 10003, on December 6, 2005 at 12:30 P.M. for the following
purposes:
1. To elect eight (8) Directors for the ensuing year; and
2. 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 18, 2005
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 CASTLE CONVERTIBLE
FUND, 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
HAL LIEBES
SECRETARY
Dated: October 28, 2005
New York, New York
PROXY STATEMENT
FOR
THE 2005 ANNUAL MEETING OF SHAREHOLDERS
OF
CASTLE CONVERTIBLE FUND, INC.
TO BE HELD ON DECEMBER 6, 2005
INTRODUCTION
The accompanying Proxy is being solicited by the Board of Directors of
Castle Convertible Fund, Inc. (the "Fund") for use at the Annual Meeting of
Shareholders to be held at 12:30 P.M. on December 6, 2005 and at any
adjournments thereof.
If the enclosed Proxy is properly executed and returned in time to be
voted at the meeting, the full and fractional shares represented (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. Unless instructions to the contrary are marked with respect to Proposal
1, the Proxy will be voted FOR the proposal stated in the accompanying Notice of
Meeting. Proxies not voted, including broker non-votes, will not be counted
toward establishing a quorum. A broker non-vote is deemed to exist when a proxy
received from a broker indicates that a broker does not have discretionary
authority to vote the shares on the matter. 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, the Proxy holders will vote all Proxies in their discretion pursuant to
Item 2. Any shareholder giving a Proxy has the right to attend the meeting to
vote his or her shares in person (revoking any prior Proxy) and also has the
right to revoke the Proxy at any time by written notice received by the Fund
prior to its exercise.
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, email 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.
This Proxy Statement and accompanying Proxy are being mailed to
shareholders on or about October 31, 2005. The address of the principal
executive office of the Fund is 111 Fifth Avenue, New York, NY 10003.
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 CASTLE CONVERTIBLE FUND,
INC., 111 FIFTH AVENUE, NEW YORK, NY 10003 OR BY CALLING 800-223-3810.
INFORMATION REGARDING VOTING SECURITIES
The Fund has only one class of shares of which 2,236,000 shares were
issued and outstanding as of the close of business on October 18, 2005, 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 18, 2005.
AMOUNT OF
TITLE OF NAME AND ADDRESS BENEFICIAL PERCENTAGE OF
CLASS OF BENEFICIAL OWNERS OWNERSHIP CLASS
- --------------------------------------------------------------------------------
Common Stock Alger Associates, Inc. 443,144 Shs.* 19.82%
111 Fifth Avenue
New York, New York 10003
Common Stock All Directors and 454,239 Shs.** 20.31%
Officers as a Group
- ----------
* Included in this figure are 71,844 shares owned by Fred Alger & Company,
Incorporated, and 618 shares owned by Alger Shareholder Services, Inc.,
wholly-owned subsidiaries of Alger Associates, Inc.
** Included in this figure are 459,552 shares (20.55% of class) beneficially
owned by immediate members of the Alger family, 1,441 shares (.06% of class)
beneficially owned by Lester L. Colbert, Jr., and 100 shares beneficially
owned by Nathan E. Saint-Amand, M.D. Included in the shares beneficially
owned by the Alger family are the 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 by virtue of his control of Alger Associates, Inc.
2
PROPOSAL NO. 1: ELECTION OF DIRECTORS
At a regular meeting held on September 7, 2005, the Directors reduced the
size of the Board of Directors from nine to eight directors. Accordingly, eight
directors are to be elected at the meeting, to serve until the next annual
meeting of shareholders and until their successors are elected and qualified.
Each of the nominees is currently a Director of the Fund; all have indicated an
intention to serve if elected and have consented to be named in this Proxy
Statement.
Fred Alger Management, Inc. (the "Adviser" or "Alger Management") 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 registered 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 111 Fifth Avenue, New York, New York 10003. The principal
place of business of Alger is 30 Montgomery Street, Jersey City, New Jersey
07302. Alger Associates and the Adviser are New York corporations and Alger is a
Delaware corporation.
Mr. Fred M. Alger III beneficially owns approximately 56% of Alger
Associates' outstanding voting securities.
Information about the Directors and officers of the Fund is set forth
below. In the following tables, the term "Alger Fund Complex" refers to the Fund
and the five other registered investment companies managed by Alger Management.
Each Director serves until an event of termination, such as death or
resignation, or until his successor is duly elected; each officer's term of
office is one year. The address of each of the Directors is 111 Fifth Avenue,
New York, NY 10003; that of Messrs. Blum, Liebes and Martins is 30 Montgomery
Street, Jersey City, NJ 07302.
NUMBER OF
PORTFOLIOS
IN THE ALGER
DIRECTOR FUND COMPLEX
AND/OR WHICH ARE
NAME, AGE, POSITION WITH PRINCIPAL OCCUPATIONS OFFICER OVERSEEN
THE FUND AND ADDRESS DURING PAST 5 YEARS SINCE BY DIRECTOR
- --------------------------------------------------------------------------------
Interested Directors Chairman of the Board of Alger 1974 22
- -------------------- Associates, Inc. ("Associates"),
Fred M. Alger III (70) Fred Alger & Company,
Chairman of the Board Incorporated ("Alger Inc."),
Alger Management, Alger
Properties, Inc. ("Properties"),
Alger Shareholder Services, Inc.
("Services"), Alger Life
Insurance Agency, Inc.
("Agency"), Fred Alger
International Advisory S.A.
("International"), and five of
the six funds in the Alger Fund
Complex; Chairman of the Boards
of Alger SICAV ("SICAV") and
Analysts Resources, Inc. ("ARI").
3
NUMBER OF
PORTFOLIOS
IN THE ALGER
DIRECTOR FUND COMPLEX
AND/OR WHICH ARE
NAME, AGE, POSITION WITH PRINCIPAL OCCUPATIONS OFFICER OVERSEEN
THE FUND AND ADDRESS DURING PAST 5 YEARS SINCE BY DIRECTOR
- --------------------------------------------------------------------------------
Hilary M. Alger (43) Trustee/Director of five of the 2003 17
Director six funds in the Alger Fund
Complex; Director of
Development, Pennsylvania
Ballet since 2004, Associate
Director of Development,
College of Arts and Sciences
and Graduate School, University
of Virginia 1999-2003,
Director of Development and
Communications, Lenox Hill
Neighborhood House 1997-1999.
Dan C. Chung (43) Chief Investment Officer, 2001 16
Director and President President and Director
of Alger Management; President
and Director of Associates,
Alger Inc., Properties,
Services, Agency, International,
and Trust; President of the six
funds in the Alger Fund
Complex; Trustee/ Director of
four of the six funds in the
Alger Fund Complex.
Non-Interested Directors
- ------------------------
Stephen E. O'Neil (73) Attorney; Private investor since 1973 23
Director 1981; Director of Brown-Forman
Corporation; Trustee/Director of
the six funds in the Alger Fund
Complex; formerly of Counsel to
the law firm of Kohler & Barnes.
Charles F. Baird, Jr. (52) Managing Partner of North Castle 2000 16
Director Partners, a private equity
securities group; Chairman of
Equinox, Leiner Health Products,
Elizabeth Arden Day Spas, Grand
Expeditions and EAS;
Trustee/Director of four of the
six funds in the Alger Fund
Complex. Formerly Managing
Director of AEA Investors, Inc.
Roger P. Cheever (60) Associate Dean of Development, 2000 16
Director Harvard University;
Trustee/Director of four of the
six funds in the Alger Fund
Complex. Formerly Deputy
Director of the Harvard
College Fund.
4
NUMBER OF
PORTFOLIOS
IN THE ALGER
DIRECTOR FUND COMPLEX
AND/OR WHICH ARE
NAME, AGE, POSITION WITH PRINCIPAL OCCUPATIONS OFFICER OVERSEEN
THE FUND AND ADDRESS DURING PAST 5 YEARS SINCE BY DIRECTOR
- --------------------------------------------------------------------------------
Lester L. Colbert, Private investor; Trustee/ 1974 17
Jr. (71) Director of five of the six
Director funds in the Alger Fund Complex.
Formerly Chairman of the Board
and Chief Executive Officer of
Xidex Corporation.
Nathan E. Saint-Amand, Medical doctor in private 1986 23
M.D. (67) practice; Member of the Board
Director of the Manhattan Institute;
Trustee/Director of the six
funds in the Alger Fund Complex.
Formerly Co-Chairman Special
Projects Committee of Memorial
Sloan Kettering.
Officers
- --------
Frederick A. Blum (51) Executive Vice President of 1997 N/A
Treasurer Alger, Inc. and Alger Management;
Treasurer of the six funds in the
Alger Fund Complex. Executive Vice
President, Treasurer and
Director of Trust.
Hal Liebes (41) Executive Vice President, Chief 2005 N/A
Secretary and Chief Legal Officer and Secretary of
Compliance Officer Alger Inc., and Alger Management,
Secretary of the six funds in the
Alger Fund Complex. Formerly
Global Chief Compliance Officer
2004, AMVESCAP PLC; and Global
General Counsel 2002-2004, and
U.S. General Counsel 1994-2002,
Credit Suisse Asset Management.
Michael D. Martins (39) Senior Vice President of Alger 2005 N/A
Assistant Treasurer and Management; Assistant Treasurer
Assistant Secretary and Assistant Secretary of the
six funds in the Alger Fund
Complex 2004-2005. Formerly Vice
President, Brown Brothers
Harriman & Co. 1997-2004.
5
Messrs. Alger and Chung are "interested persons" (as defined in the
Investment Company Act) of the Fund because of their affiliations with Alger
Management. Mr. Chung is Mr. Alger's son-in-law. Ms. Alger, a daughter of Mr.
Alger, is an "interested person" because she is an immediate family member of
Mr. Alger. No Director is a director of any public company except as may be
indicated under "Principal Occupations."
No director, officer or employee of Alger Management or its affiliates
receives any compensation from the Fund for serving as an officer or Director of
the Fund. The Fund pays each non-interested Director $2,000 for each meeting
attended, to a maximum of $8,000, plus travel expenses incurred for attending
the meeting.
The Fund did not offer its Directors any pension or retirement benefits
during or prior to the fiscal year ended October 31, 2004. The following table
provides compensation amounts paid to current non-interested Directors of the
Fund for the fiscal year ended October 31, 2004.
COMPENSATION TABLE
AGGREGATE TOTAL COMPENSATION PAID
COMPENSATION TO DIRECTORS FROM
NAME OF DIRECTOR FROM THE FUND THE ALGER FUND COMPLEX
---------------- ----------------- ---------------------------
Charles F. Baird, Jr. $8,000 $30,000
Roger P. Cheever $8,000 $30,000
Lester L. Colbert, Jr. $8,000 $38,000
Stephen E. O'Neil $8,000 $44,000*
Nathan E. Saint-Amand $8,000 $44,000
- --------------
* A portion of this amount was paid in 2005.
None of the non-interested Directors and none of their immediate family
members owns any securities issued by Alger Management, Alger Inc., or any
company (other than a registered investment company) controlling, controlled by
or under common control with Alger Management.
The following table shows each Director's beneficial ownership as of
October 18, 2005 by dollar range, of equity securities of the Fund and of the
funds in the Alger Fund Complex overseen by that Director. The ranges are as
follows: A = none; B = $1-$10,000; C = $10,000-$50,000; D = $50,000-$100,000;
E = over $100,000.
6
AGGREGATE EQUITY SECURITIES
EQUITY SECURITIES OF FUNDS IN ALGER FUND
NAME OF DIRECTOR OF THE FUND COMPLEX OVERSEEN BY DIRECTOR
--------------------- ------------------- ----------------------------
Interested Directors
--------------------
Fred M. Alger III E E
Dan C. Chung A E
Hilary M. Alger A E
Non-Interested Directors
------------------------
Charles F. Baird, Jr. A A
Roger P. Cheever A E
Lester L. Colbert, Jr. C D
Stephen E. O'Neil A A
Nathan E. Saint-Amand B E
Four regular meetings and one special meeting of the Board of Directors
were held during the fiscal year ended October 31, 2004. During that period each
of the Directors attended at least 75% of the meetings of the Board, and of the
Audit Committee if he was a member, held during that time.
The Fund's Audit Committee, which oversees the Fund's accounting and
financial reporting policies and the independent audit of its financial
statements, met five times during the fiscal year ended October 31, 2004. The
Fund's Board of Directors has no nominating or compensation committee or any
committee performing similar functions.
The Board of Directors recommends that shareholders vote FOR Proposal
No. 1.
NOMINATIONS OF DIRECTORS
The Fund does not have a standing nominating committee. The Directors who
are not "interested persons" of the Fund as defined in the Investment Company
Act of 1940, as amended, each of whom is also "independent" as defined in
Section 121A of the Listing Requirements of the American Stock Exchange (the
"Independent Directors") are responsible for identifying and nominating
candidates for appointment as Directors. The Board believes that the Independent
Directors are in the best position to screen and select qualified candidates for
Board membership who will provide the experience, perspective, skills and other
attributes necessary to effectively advance the interests of the Fund's
shareholders. In screening and selecting qualified candidates for Board
membership, the Independent Directors may consider suggestions from various
sources, including shareholders. Shareholders may submit names of potential
candidates for nomination by letter addressed to the attention of the
Independent Directors, c/o the Secretary of the Fund. The Independent Directors
may also consider candidates recommended by Fred Alger Management, Inc., and may
retain an executive
7
search firm and/or outside legal, financial or other external counsel that they
deem necessary or desirable to assist in the nominating and/or screening
process.
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS
Shareholders wishing to communicate with the Directors may address such
communications to the Board of Directors, c/o the Secretary of the Fund,
specifying an individual Director by name if appropriate. All such
communications are relayed to Board members.
DIRECTOR ATTENDANCE AT ANNUAL SHAREHOLDER MEETINGS
The Fund does not have a policy regarding attendance by Directors at
annual shareholder meetings. No Directors attended the 2004 Annual Meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the 1934 Act and Section 30(h) of the 1940 Act require
the Fund's Officers and Director's, certain Officers and Directors of the
investment adviser, affiliated persons of the investment adviser, and persons
who beneficially own more than 10% of the Fund's shares to file reports of
ownership with the SEC and the Fund.
Based solely upon its review of the copies of such forms received by it,
the Fund believes that, for the fiscal year ended October 31, 2005, all filing
requirements applicable to such persons were compiled with.
8
AUDIT COMMITTEE REPORT; AUDIT FEES
AUDIT COMMITTEE REPORT. The Audit Committee, for which the Board of
Directors has adopted a written charter, (a) selects, oversees and sets the
compensation of the Fund's independent auditors, (b) oversees the Fund's
accounting and financial reporting policies and practices and the Fund's
internal controls and (c) oversees the quality and objectivity of the Fund's
financial statements and the independent audit thereof. At its meeting held on
December 7, 2004, the Committee reviewed and discussed with Fund management and
Ernst & Young, the Fund's independent registered public accounting firm for the
fiscal year ended October 31, 2004, the audit of the Fund's financial statements
and further discussed with Ernst & Young certain matters required to be
discussed by Statements on Auditing Standards No. 61. The Committee received
from Ernst & Young written disclosures and the letter required by Independence
Standards Board Standard No. 1 and discussed with Ernst & Young that firm's
independence. Based on these reviews and discussions, the Committee recommended
to the Board that the audited financial statements be included in the Fund's
Annual Report to shareholders for the fiscal year ended October 31, 2004.
The members of the Audit Committee are Lester L. Colbert, Jr., Stephen E.
O'Neil and Nathan E. Saint-Amand. None of the members of the Committee is an
"interested person" of the Fund and each is "independent" as defined in the
listing standards of the American Stock Exchange.
A representative of Ernst & Young is expected to be present at the
meeting to respond to appropriate questions; the representative will have the
opportunity to make a statement if he or she desires to do so.
AUDIT FEES. The following table sets forth the fees paid to Ernst & Young
for the fiscal years ended October 31, 2003 and 2004 for professional services
rendered for the audit of the Fund's financial statements for those fiscal years
and other services.
YEAR ENDED YEAR ENDED
OCTOBER 31, 2003 OCTOBER 31, 2004
----------------- -----------------
Audit fees $21,000 $23,200
Audit related fees 0 0
Tax fees(1) $ 2,650 $ 3,300
All other fees(2) $12,500 $15,700
- ----------
(1) Tax fees for fiscal 2003 and fiscal 2004 includes the review of Fund's
federal, state and local tax returns.
(2) Other fees include a debt analysis review and a review of the semi-annual
financial statements.
9
All services to be performed by the Fund's independent registered public
accounting firm must be pre-approved by the Fund's Audit Committee. Accordingly,
all of the services represented in the table were pre-approved by the Audit
Committee. Ernst & Young LLP performed no services for Alger Management or any
entity controlling, controlled by or under common control with Alger Management
during the fiscal years ended October 31, 2003 and 2004. Aggregate non-audit
fees billed by Ernst & Young for the fiscal years ended October 31, 2003 and
2004 were $15,150 and $19,000, respectively.
LITIGATION
Alger Management has responded to inquiries, document requests and/or
subpoenas from regulatory authorities, including the United States Securities
and Exchange Commission ("SEC"), the Office of the New York State Attorney
General, the Attorney General of New Jersey, and the West Virginia Securities
Commissioner, in connection with their investigations of practices in the mutual
fund industry identified as "market timing" and "late trading."
On August 31, 2005, the West Virginia Securities Commissioner in an EX
PARTE Summary Order to Cease and Desist and Notice of Right to Hearing concluded
that Alger Management and Alger Inc. had violated the West Virginia Uniform
Securities Act, and ordered Alger Management and Alger Inc. to cease and desist
from further violations of the Act by engaging in the market-timing related
conduct described in the order. The EX PARTE order provided notice of their
right to a hearing with respect to the violations of law asserted by the
Commissioner. Other firms unaffiliated with Alger Management were served with
similar orders. Alger Management and Alger Inc. intend to request a hearing for
the purpose of seeking to vacate or modify the order.
In addition, several purported class actions and shareholder derivative
suits, and a civil lawsuit by the West Virginia attorney general, have been
filed against various parties in the mutual fund industry, including Alger
Management, certain mutual funds managed by Alger Management (the "Alger Mutual
Funds"), and certain current and former Alger Mutual Fund trustees and officers,
alleging wrongful conduct related to market-timing and late-trading by mutual
fund shareholders. These cases have been transferred to the U.S. District Court
of Maryland by the Judicial Panel on Multidistrict Litigation for consolidated
pre-trial proceedings. In September 2004, consolidated amended complaints
involving these cases (not yet including the West Virginia action)-- a
Consolidated Amended Fund Derivative Complaint (the "Derivative Complaint") and
two substantially identical Consolidated Amended Class Action Complaints
(together, the "Class Action Complaint") -- were filed in the Maryland federal
district court under the caption number 1:04-MD-15863 (JFM). The civil cases
remain pending.
The Derivative Complaint alleges (i) violations, by Alger Management
and, depending on the specific offense alleged, by its immediate parent, Alger
Inc., which is the Distributor of the Alger Mutual Funds, and/or the fund
trustee defendants, of Sections 36(a), 36(b), 47, and 48 of the Investment
Company Act of 1940 and of Sections 206 and 215 of the Investment Advisers Act
of 1940, breach of fiduciary duty, and breach of contract, (ii) various offenses
by other third-party defendants, and (iii) unjust enrichment by all the named
defendants. The Class Action Complaint alleges, in addition to the offenses
listed above, (i) violations, by Alger Management, Alger Inc., their affiliates,
the funds named as defendants, and the current and former fund trustees and
officers, of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933,
Sections 10(b) (and Rule 10b-5 thereunder) and 20(a) of the Securities Exchange
Act of 1934, and Section 34(b) of the Investment Company Act of 1940, (ii)
breach of contract by the funds named as defendants, and (iii) unjust enrichment
of the defendants. The West Virginia attorney general action also alleges
violations of the West Virginia Consumer Credit and Protection Act and other
wrongful conduct. Motions to dismiss the Class Action Complaint and the
Derivative Complaint have been filed, but not yet decided. Rulings are expected
in or about early November 2005.
Alger Management does not believe that the Alger Mutual Funds are
themselves targets of the regulatory investigations as potential enforcement
defendants. It is possible, however, that the actions of Alger Management and
certain of its affiliates and their senior executives and Alger Mutual Fund
senior personnel are of interest to the investigators. Although no regulatory
enforcement action has yet been commenced against Alger Management, board
members or personnel in connection with the matters being investigated (other
than the actions resolved in the fall of 2003 against James P. Connelly, Jr.,
former Vice Chairman of Alger Inc.), it is possible that the SEC and the states
may pursue actions in the future. The potential timing of any such action or the
relief or remedies that may be sought are not known at this time. Alger
Management is not yet able to predict the outcomes of these matters. The SEC
and, in some cases, state government authorities have a variety of
administrative and civil enforcement powers, including injunctive powers,
authority to assess fines and penalties and order restitution, authority to
limit the activities of a person or company and other enforcement powers, that
may be exercised administratively or through the courts.
Under Section 9(a) of the Investment Company Act, if any of the various
regulatory proceedings or lawsuits were to result in a court injunction against
Alger Management or Alger Inc., Alger Management would, in the absence of
exemptive relief granted by the SEC, be barred from serving as investment
adviser/sub-adviser for any registered investment company, including the Fund.
While exemptive relief from Section 9(a) has been granted in certain other
cases, there is no assurance that such exemptive relief would be granted if
sought. In addition, it is possible that these matters and/or other developments
resulting from these matters could result in loss of Alger Management personnel,
diversion of time and attention of Alger Management personnel, diminishment of
financial resources of Alger Management, or other consequences potentially
adverse to the Fund. Alger Management cannot predict the potential effect of
such actions upon Alger Management or the Fund. There can be no assurance that
the effect, if any, would not be material.
HOW TO VOTE YOUR SHARES
1. VOTE BY MAIL. You may vote your shares by signing and dating the enclosed e
proxy card, and mailing it in the enclosed postage-paid envelope.
2. VOTE BY TELEPHONE. You may vote your shares by telephone by calling the
toll-free number on your proxy card.
3. VOTE THROUGH THE INTERNET. You may vote your shares by computer by going to
the Internet address provided on the proxy card and following the instructions,
using your white proxy card as a guide.
OTHER MATTERS
The Board 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.
10
SHAREHOLDERS' PROPOSALS
A shareholder proposal intended to be presented at the Fund's 2006 Annual
Meeting of Shareholders must be received by the Fund by June 30, 2006 in order
to be included in the Fund's proxy statement and form of proxy relating to that
meeting. Timely submission of a proposal does not guarantee its inclusion in the
proxy statement and form of proxy. A shareholder wishing to provide notice of a
proposal in the manner prescribed by Rule 14a-4(c)(1) under the Securities
Exchange Act of 1934 must submit written notice of the proposal to the Fund by
September 16, 2006. For these purposes the address of the Fund is:
Castle Convertible Fund, Inc.
111 Fifth Avenue
New York, New York 10003
Attn: Secretary
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.
Dated: October 28, 2005
11
CASTLE CONVERTIBLE FUND, INC.
PROXY
ANNUAL MEETING OF SHAREHOLDERS DECEMBER 6, 2005
The undersigned shareholder of Castle Convertible Fund, Inc. hereby appoints Dan
C. Chung 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 18, 2005, at the
Annual Meeting of Shareholders of the Fund to be held at the offices of the
Fund, 111 Fifth Avenue - 2nd Floor, New York, New York 10003 at 12:30 P.M. on
December 6, 2005, 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 of
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 M OR H IN
PLEASE MARK BOXES [SOLID SQUARE BULLET] OR |X| IN BLUE OR BLACK INK.
1. ELECTION OF DIRECTORS FOR all nominees listed WITHHOLD AUTHORITY to
below (except as marked vote for all nominees
to the contrary below) |_| listed 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, Hilary M. Alger, Charles F. Baird, Jr., Roger P. Cheever,
Dan C. Chung, Lester L. Colbert, Jr., Stephen E. O'Neil, Nathan E. Saint-Amand
2. 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.
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Signature(s) Signature(s)
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Dated Social Security or
Tax Identification Number
THIS PROXY, WHEN DATED AND SIGNED, SHOULD BE
MAILED PROMPTLY TO CASTLE CONVERTIBLE FUND,INC.,
30 MONTGOMERY STREET, JERSEY CITY, NJ 07302. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES
IN THE ENCLOSED ENVELOPE.