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 [x]
Bulldog Investors, LLC
Attn: Phillip Goldstein
250 Pehle Avenue, Suite 708
Saddle Brook, NJ 07663
Phone: 201 881-7100
Fax: 201 556-0097
Check the appropriate box:
Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
Definitive Proxy Statement [x]
Definitive Additional Materials
Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-
12
Dividend & Income Fund
(Name of Registrant as Specified in Its Charter)
Bulldog Investors, LLC
Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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No fee required [x].
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:
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applies:
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computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
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Fee paid previously with preliminary materials [].
Check box if any part of the fee is offset as provided by
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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 [].
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Bulldog Investors, LLC, 250 Pehle Avenue, Suite 708,
Saddle Brook, NJ 07663 (201) 881-7111 // Fax: (201) 556-0097
// pgoldstein@bulldoginvestors.com
May 12, 2020
Dear Fellow Stockholder of Dividend & Income Fund (DNI):
Have you heard? Tom Winmill and his "yes-men" trustees on the board
of DNI have a sense of humor, albeit a warped one. They are apparently
trying to secure a place for themselves on the list of "the world's
biggest lies." You probably know some of those lies: "The check is in
the mail." "Of course I will respect you in the morning." "Your call
is very important to us." Here is their entry: "Your vote is very
important and...[w]e encourage all shareholders to participate in the
governance of the Fund."
The truth is completely the opposite. Winmill and his cronies on the
Board have done everything they can to insure that your vote is
meaningless and that, regardless of what the public shareholders want,
DNI will forever be run for the benefit of the Winmill clan. DNI's
shares consistently trade at one of biggest discounts to net asset
value ("NAV") in the closed-end fund universe. Why is that? We think
it stems from management's utter contempt for shareholder rights. The
consensus among savvy investors is that DNI has the worst governance
structure of any closed-end fund in the United States.
The offender-in-chief of DNI is Thomas B. Winmill. Tom also controls
Bexil, DNI's investment manager from which he derives significant income.
Apparently, Winmill does not want to be a fiduciary for shareholders
because he thinks he should be allowed to put his own interests ahead of
those of DNI's shareholders. In fact, two Delaware courts have found
that he breached his fiduciary duty to a public company he controlled.
Toward that goal, Winmill has championed a number of measures to insulate
himself from any semblance of accountability to DNI's shareholders. These
measures have understandably created a huge drag on the price of DNI's
shares. To insure his nefarious plan succeeds, he surrounds himself with
trustees that are more like lapdogs than watchdogs.
With DNI shares often trading at a discount in excess of 20%, it makes
sense for the Fund to buy its own shares in the market, which would
materially increase NAV with no risk. So, why have the trustees not
authorized a share repurchase plan? The reason is that share repurchases
would also reduce Winmill's management fees. If something is good for
shareholders but bad for Winmill, you can count on the trustees to side
with Winmill. Time and again, they have shown they are really looking out
for Bexil and Winmill, not shareholders.
In this case, they have changed the location of the annual meeting to a
shack in the boondocks of New Hampshire to make it as inconvenient as
possible for shareholders to attend. They have also committed to waste
$300,000 of shareholder money to solicit proxies to protect Winmill, rather
than just allowing shareholders to vote as they wish in a fair election.
Finally, they have falsely told you that a vote of 75% of the outstanding
shares is needed to terminate Winmill's management agreement - even though
federal law establishes a lower standard. That is consistent with Winmill's
use of deception and his contempt for law and shareholder rights. Therefore,
if shareholders ever hope to get better management, narrow the discount,
and improve DNI's investment performance, Winmill has to go.
Here are some questions for Tom Winmill and his hypothetical answers that
show why he should be fired now:
Q: Shouldn't DNI's trustees and manager adhere to the highest level of
fiduciary duty?
Tom Winmill: "Drop dead!"
Q: Shouldn't the trustees consider action to address DNI's discount of
more than 20%?
Tom Winmill: "Drop dead!"
Q: Shouldn't shareholders be able to present proposals at DNI's annual
meeting?
Tom Winmill: "Drop dead!"
Q: Shouldn't shareholders be able to elect trustees other than the incumbents?
Tom Winmill: "Drop dead!"
Q: DNI prohibits all shareholders except Bexil from owning more than 5% of the
outstanding shares. Isn't that unfair?
Tom Winmill: "Drop dead!"
The Investment Company Act of 1940 requires mutual funds to establish a
governance system that relies heavily on shareholders' ability to exercise
voting rights that serve as a check on investment company insiders. So, how
have Winmill and his enablers been able to virtually eliminate the ability of
shareholders to hold them accountable? Answer: They did it by deceiving both
shareholders and the SEC. Here's how.
In 2012, Winmill asked shareholders to approve a plan to convert DNI from a
corporation to a statutory trust. He claimed that a statutory trust would
provide management with "more flexibility with respect to the administration
of the Fund" and that "the interests of the Fund's shareholders would not
be diluted as a result of the Reorganization." It has become evident that
his real motive was to strip shareholders of as many of their rights as
possible in order to consolidate his power over DNI. Rather than disclose
that motive, he misled shareholders and the SEC. For example, when the SEC
asked DNI for assurance that the increased "flexibility" would only be used
for ministerial administrative changes, i.e., routine changes that do not
require any judgment, Winmill and his co-conspirators responded that the
conversion to a statutory trust would give them "flexibility primarily
with regard to its ministerial administration." Notice how they added
the weasel word, "primarily." They later took advantage of that "flexibility"
to amend DNI's Trust Agreement to provide that "no Trustee, officer, employee
or agent of the Trust shall owe any fiduciary duties to the Trust...or to any
Shareholder...." Was that Winmill's intent all along? It sure seems like a
bait and switch move designed to mislead the SEC.
In the end, the question is whether shareholders deserve a manager and
trustees that are committed to a high level of fiduciary duty and to a
governance structure that is best in class. That will never happen and
DNI's shares will likely continue to trade at a wide discount to their
NAV as long as Winmill is running the show. The solution is to dump Winmill.
He desperately fears that might happen and has threatened to sue us to
prevent shareholders from voting to fire him. We are not intimidated nor
should you be.
This is your opportunity to seize control of DNI back from Tom Winmill and
place it in the hands of the public shareholders. Your vote on the enclosed
Green Proxy Card is a vote to fire Tom Winmill and to increase the value of
your shares.
***
PLEASE RETURN THE ENCLOSED GREEN PROXY CARD TO VOTE FOR OUR NOMINEE AND OUR
PROPOSALS TO (1) CONDUCT A SELF-TENDER OFFER, AND (2) TERMINATE THE MANAGEMENT
AGREEMENT WITH BEXIL, TOM WINMILL'S FIRM. IF YOUR SHARES ARE HELD IN STREET
NAME, YOU MAY VOTE ONLINE AT WWW.PROXYVOTE.COM OR BY TELEPHONE AT
1-800-454-8683. IF YOU HAVE ALREADY RETURNED MANAGEMENT'S PROXY CARD (EVEN IF
YOU VOTED AGAINST THE BOARD'S NOMINEE), YOU STILL NEED TO VOTE OUR GREEN
PROXY CARD TO OVERIDE IT.
IF YOU HAVE ANY QUESTIONS ABOUT HOW TO VOTE YOUR PROXY, PLEASE CALL INVESTORCOM
AT 1-877-972-0090.
Very truly yours,
/S/Phillip Goldstein
Phillip Goldstein
Managing Member
PROXY STATEMENT OF BULLDOG INVESTORS, LLC IN OPPOSITION TO THE
SOLICITATION BY THE BOARD OF TRUSTEES OF DIVIDEND & INCOME
FUND FOR THE 2020 ANNUAL MEETING OF SHAREHOLDERS
Bulldog Investors, LLC ("Bulldog Investors") is sending this proxy statement
and the enclosed GREEN proxy card to stockholders of Dividend & Income Fund
(the "Fund") of record as of February 21, 2020. We are soliciting a proxy to
vote your shares at the 2020 annual meeting of shareholders (the "Meeting")
scheduled for June 10, 2020. Please refer to the Fund's proxy soliciting
material for detailed additional information concerning the Meeting and the
matters to be considered by shareholders. This proxy statement and the
enclosed GREEN proxy card are first being sent to stockholders on or about
May 15, 2020.
INTRODUCTION
The only matter the Board intends to present for a vote at the Meeting is the
election of one trustee. The Board has been advised that our affiliate also
intends to present a nominee. In addition, we shall attempt to present the
following proposals: (1) a non-binding proposal to conduct a self-tender offer,
and (2) a binding proposal to conditionally terminate the investment management
agreement with Bexil Advisers LLC ("Bexil"). The Board has indicated that it
will not permit us to nominate anyone for election as a trustee and that it
will not permit us to present any proposals. We believe the Board would be
acting unlawfully in doing so and consequently, litigation is possible. We
are soliciting a proxy to vote your shares FOR the election of our nominee
and FOR each of our proposals.
REASONS FOR THE SOLICITATION
Congress adopted the Investment Company Act of 1940 ("the 1940 Act") in part
because it found that investors are adversely affected when investment
companies issue stock containing inequitable or discriminatory provisions.
To address that problem, the 1940 Act requires mutual funds to have a
governance system that relies heavily on shareholders' ability to exercise
voting rights that serve as a check on investment company insiders. Yet,
the Fund's insiders, led by Tom Winmill, have built an elaborate moat to
insulate themselves from any semblance of accountability to shareholders.
In fact, to insulate themselves from liability, they boldly declare that
"no Trustee, officer, employee or agent of the Trust shall owe any
fiduciary duties to the Trust...or to any Shareholder..." This solicitation
is intended to give shareholders an opportunity to express their views
about whether Mr. Winmill and his fellow insiders have engaged in personal
misconduct which has led to the Fund's shares persistently trading at a
wide discount to their net asset value ("NAV").
HOW YOUR PROXIES WILL BE VOTED
If you complete and return a GREEN proxy card to us, and unless you direct
otherwise (or the Board prevents us from voting your proxy card), we intend
to vote your shares FOR our nominee and FOR our proposals.
VOTING REQUIREMENTS
As of February 21, 2020, the Fund had 12,449,614 shares of common stock
outstanding. A stockholder is entitled to cast one vote for each share held.
A quorum will exist if the holders of one-third of the Fund's outstanding
shares are present or represented by proxy. According to the Board's proxy
statement, "Pursuant to the Fund's Bylaws, unless all nominees for Trustee
are approved by a majority of the Continuing Trustees, the affirmative vote
of the holders of at least 75% of the outstanding shares of the Fund entitled
to be voted shall be required to elect a Trustee. If all nominees for Trustee
are approved by a majority of the Continuing Trustees, a plurality...of all
the votes cast...shall be sufficient to elect a Trustee."
The Board has advised us that it will not permit shareholders to vote for
our nominee. We believe that would be unlawful personal misconduct because
the Board's motive is to have an uncontested sham election. Moreover, the
Board's discriminatory 75% standard for election of a trustee in a contested
election may also constitute personal misconduct.
If a quorum exists (and the Board permits us to present it), our self-tender
proposal will be approved if it receives "For" votes cast by (a) a majority
of all the votes cast at the Meeting, or (b) the holders of at least 75% of
the outstanding shares (depending on whether or not the Trustees approve it).
Abstentions and broker non-votes, if any, will not be counted as votes cast
and therefore will either (a) have no effect on its outcome, or (b) be
equivalent to an "Against" vote.
The approval of the conditional proposal to terminate the investment
management agreement with Bexil requires the affirmative vote by holders
of the lesser of (a) 67% or more of the shares of the Fund represented at
the Meeting if more than 50% of the outstanding shares are represented or
(b) more than 50% of the Fund's outstanding shares.
PROPOSAL 1: ELECTION OF ONE TRUSTEE
Our affiliate intends to nominate Matthew S. Crouse for election as a trustee.
Mr. Crouse does not own any shares of the Fund. Unlike the incumbent nominee,
Mr. Crouse is an advocate for shareholder democracy, good corporate governance
and enhancing stockholder value. There are no arrangements or understandings
between Mr. Crouse and Bulldog Investors or its affiliates in connection with
his nomination. Relevant information about Mr. Crouse is as follows:
Matthew S. Crouse, CFA, MBA, PhD (Age 48); 3696 E. Lois Lane, Salt Lake
City, UT 84124; Mr. Crouse has been an adjunct professor of finance in
the M.B.A. program at Westminster College in Salt Lake City, Utah since
2015. He received the 2016-2017 Gore School of Business Adjunct Faculty
of the Year Award. Mr. Crouse's research interests involve closed-end
mutual funds and exchange-traded funds (ETFs) and in 2019 an article he
wrote on leveraged ETFs was published in the Journal of Index Investing.
From 2003 to 2018, Mr. Crouse worked as a portfolio manager at Western
Investment LLC, a private investment firm that specializes in closed-end
mutual funds. From 2002 to 2003, he worked as manager of market risk at
Duke Energy Corporation (NYSE:DUK) an electric power holding company,
and from 2001 to 2002, he served as director of research at New Power
Holdings Inc., a provider of electricity and natural gas to residential
and small commercial customers in the United States. Mr. Crouse earned a
BS in Electrical Engineering (magna cum laude) in 1993 and a PhD in
Electrical Engineering in 1999, both from Rice University. He earned an
MS in Electrical Engineering from the University of Illinois in 1995
and an MBA in Finance from the University of Houston in 2003. Matt has
been a CFA charterholder since 2005 and is a member of the CFA Society
of Salt Lake City. Mr. Crouse would likely be deemed to be an "audit
committee financial expert" as such term is defined in the Sarbanes-
Oxley Act of 2002.
If no direction is made, (and the Board does not prevent us from voting your
proxy card), this proxy will be voted FOR Mr. Crouse.
PROPOSAL 2: A NON-BINDING PROPOSAL TO CONDUCT A SELF-TENDER OFFER AT OR
CLOSE TO NAV
The Fund's common stock has long traded at one of the widest discounts of
all closed-end funds. The current discount from NAV is about 21%. We think
the Board of Trustees should authorize a self-tender offer for the Fund's
common shares at or close to NAV to afford shareholders an opportunity to
receive a price closer to NAV for their shares. If a majority of the Fund's
outstanding common shares are tendered, that would demonstrate that there
is insufficient shareholder support for continuing the Fund in its
closed-end format and other options like liquidation should be considered.
If no direction is made (and the Board does not prevent us from voting your
proxy card), this proxy will be voted FOR this proposal.
PROPOSAL 3: THE FUND'S INVESTMENT MANAGEMENT AGREEMENT WITH BEXIL SHALL BE
TERMINATED UNLESS WITHIN THIRTY DAYS AFTER THE DATE THIS MEETING IS
CONCLUDED, THOMAS B. WINMILL RECOMMENDS THAT THE BOARD OF TRUSTEES (1)
ELIMINATE THE FUND'S 4.99% SHARE OWNERSHIP LIMITATION, AND (2) REPLACE
THE FUND'S 75% VOTE STANDARD IN A CONTESTED ELECTION WITH A PLURALITY
STANDARD.
The purpose of this binding proposal is to increase shareholder value by
(1) better enabling shareholders to hold management accountable, and (2)
minimizing the possibility of a failed election and holdover directors.
Thomas B. Winmill is the Fund's Chairman, President, Chief Executive
Officer, and Chief Legal Officer. He is also the President, Chief Executive
Officer, and Chief Legal Officer of the Bexil, the Fund's Investment
Manager. As such, his influence over the Fund is significant. Like other
companies with which Mr. Winmill is associated, the Fund has a number of
provisions that are intended to entrench management and repress shareholder
democracy. Such provisions have been shown to correlate with poor stock
performance. One such provision is a prohibition on the ability of persons
to own more than 4.99% of the Fund's outstanding shares without the
Trustees' prior approval. Another provision is the Fund's 75% vote standard
to win a contested election. The only conceivable purpose for that standard
is to prevent stockholders from being able to elect the nominees of their
choice because a contested election is almost certain to result in a
so-called "failed election" which would leave the incumbent trustees in
their positions as "holdover" (or unelected) trustees - even if an incumbent
nominee receives fewer votes than a challenger.
The Fund has acknowledged that these provisions can impede transactions
that are favorable to shareholders. Therefore, we believe they should be
eliminated. The Fund's investment management agreement with Bexil states
that shareholders may vote to terminate it at any time. If Mr. Winmill
declines to recommend the proposed governance reforms, Bexil should be
replaced by an investment manager that is not hostile to shareholder
rights.
If no direction is made (and the Board does not prevent us from voting your
proxy card), this proxy will be voted FOR this proposal.
REVOCATION OF PROXIES
You may revoke your proxy by executing and delivering a later dated proxy
or by voting in person at the Meeting. Attendance at the Meeting will not
by itself revoke a proxy. There is no limit on the number of times you may
revoke your proxy and only your most recent proxy will be counted.
THE SOLICITATION
We intend to solicit proxies by mail, and may utilize other means, e.g.,
telephone or the internet. Our proxy materials are available at:
www.bulldoginvestorsproxymaterials.com. Persons affiliated with or
employed by us may assist us in the solicitation of proxies. Banks,
brokerage houses and other securities intermediaries will be requested
to forward this proxy statement and the enclosed GREEN proxy card to
the beneficial owners for whom they hold shares of record. We will
reimburse these organizations for their reasonable out-of-pocket
expenses. Initially, we will bear the expenses related to this proxy
solicitation. Because we believe that all stockholders will benefit
from this solicitation, we intend to seek, subject to any applicable
regulatory requirements, reimbursement of our expenses from the Fund.
Stockholders will not be asked to vote on the reimbursement of these
expenses, which we estimate will be $50,000.
PARTICIPANTS
As of February 21, 2020, Bulldog Investors, 250 Pehle Avenue, Suite 708,
Saddle Brook, NJ 07663, the soliciting stockholder, beneficially owned
596,753 common shares of the Fund which were purchased between October
16, 2018 and October 16, 2019.
May 12, 2020
PROXY CARD
THIS PROXY IS SOLICITED BY BULLDOG INVESTORS, LLC IN OPPOSITION
TO THE SOLICITATION BY THE BOARD OF TRUSTEES OF DIVIDEND &
INCOME FUND FOR THE 2020 ANNUAL MEETING OF SHAREHOLDERS
(THE "MEETING").
The undersigned hereby appoints John Grau and Phillip Goldstein and
each of them, as the undersigned's proxies, with full power of
substitution, to attend the Meeting and any adjourned or postponed
Meeting, and to vote on all matters that come before the Meeting the
number of shares that the undersigned would be entitled to vote if
present in person, as specified below.
(INSTRUCTIONS: Mark votes by placing an "x" in the appropriate [ ].)
1. ELECTION OF ONE TRUSTEE
[ ] FOR MATTHEW S. CROUSE [ ] WITHHOLD AUTHORITY
2. A NON-BINDING PROPOSAL TO CONDUCT A SELF-TENDER OFFER AT OR CLOSE
TO NAV
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. THE FUND'S INVESTMENT MANAGEMENT AGREEMENT WITH BEXIL SHALL BE
TERMINATED UNLESS WITHIN THIRTY DAYS AFTER THE DATE THIS MEETING IS
CONCLUDED, THOMAS B. WINMILL RECOMMENDS THAT THE BOARD OF TRUSTEES
(1) ELIMINATE THE FUND'S 4.99% SHARE OWNERSHIP LIMITATION, AND (2)
REPLACE THE FUND'S 75% VOTE STANDARD IN A CONTESTED ELECTION WITH
A PLURALITY STANDARD.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Please sign and date below. Your shares will be voted as directed.
If no direction is made, this proxy will be voted FOR the election
of the above nominee as a Trustee and FOR each proposal. The
undersigned hereby acknowledges receipt of the proxy statement
dated May 12, 2020 of Bulldog Investors and revokes any proxy
previously executed.
Signature(s) ___________________ Dated: ______________