-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FAi3xdNKFpRTffBlEi82vOGCJcrOHKVuJaD0rZGlVTQeiM0ilL7q1UORZx4bmKpU gh2wgiLpJBTY8T1shcdXLw== 0000793040-03-000041.txt : 20031126 0000793040-03-000041.hdr.sgml : 20031126 20031126111904 ACCESSION NUMBER: 0000793040-03-000041 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20030930 FILED AS OF DATE: 20031126 EFFECTIVENESS DATE: 20031126 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ELLSWORTH CONVERTIBLE GROWTH & INCOME FUND INC CENTRAL INDEX KEY: 0000793040 IRS NUMBER: 133345139 STATE OF INCORPORATION: MD FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-04656 FILM NUMBER: 031025134 BUSINESS ADDRESS: STREET 1: 65 MADISON AVENUE STREET 2: SUITE 550 CITY: MORRISTOWN STATE: NJ ZIP: 07960 BUSINESS PHONE: (973) 631-1177 MAIL ADDRESS: STREET 1: 65 MADISON AVE STREET 2: SUITE 550 CITY: MORRISTOWN STATE: NJ ZIP: 07960 N-CSR 1 e0903ncsr.txt ELLSWORTH N-CSR 09-30-2003 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-2151 -------------------------------------------- ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND, INC. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 65 Madison Avenue, Morristown, New Jersey 07960-7308 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Thomas H. Dinsmore Ellsworth Convertible Growth and Income Fund, Inc. 65 Madison Avenue Morristown, New Jersey 07960-7308 (Name and address of agent for service) Copy to: Martha J. Hays, Esq. Ballard Spahr Andrews & Ingersoll, LLP 1735 Market Street Philadelphia, PA 19103-7599 Registrant's telephone number, including area code: 973-631-1177 Date of fiscal year end: September 30, 2003 Date of reporting period: September 30, 2003 ITEM 1. REPORTS TO STOCKHOLDERS. Include a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1). ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND [LOGO] 2003 Annual Report September 30, 2003 2003 Annual Report September 30, 2003 Ellsworth Convertible Growth and Income Fund, Inc. (the "Fund") operates as a closed-end, diversified management investment company and invests primarily in convertible securities, with the objectives of providing income and the potential for capital appreciation -- which objectives the Fund considers to be relatively equal, over the long-term, due to the nature of the securities in which it invests. Highlights Performance through September 30, 2003 with dividends reinvested
9 Months 1 Year 5 Years 10 Years -------- ------ ------- -------- Ellsworth market value (a) 11.00% 10.81% 50.20% 175.13% Ellsworth net asset value (b) 10.92 14.02 33.88 133.72 Closed-end convertible fund average (b) 20.29 27.36 42.09 103.80 S&P 500 (a) 14.72 24.40 5.09 160.42 Russell 2000 (a) 28.60 36.54 44.01 92.80(c) Lehman Aggregate Bond Total Return Index (b) 3.78 5.41 37.83 95.26
Performance data represent past results and do not reflect future performance. (a) From Bloomberg L.P. pricing service. (b) From Lipper, Inc. Closed-End Fund Performance Analysis, dated September 30, 2003. (c) Simple appreciation of index. - -------------------------------------------------------------------------------- Quarterly History of NAV and Market Price
Net Asset Values Market Prices (AMEX, symbol ECF) Qtr. Ended High Low Close High Low Close - ---------- ---- --- ----- ---- --- ----- Dec. 02 $8.06 $7.51 $7.94 $7.90 $6.95 $7.45 Mar. 03 8.16 7.69 7.90 7.96 7.41 7.52 Jun. 03 8.71 7.95 8.58 8.42 7.52 8.31 Sep. 03 8.71 8.35 8.58 8.51 7.97 8.05
- -------------------------------------------------------------------------------- Dividend Distributions (12 Months)
Record Payment Capital * Corporate Date Date Income Gains Deduction ---- ---- ------ ----- --------- 10/25/02 11/27/02 $0.086 -- 20% 2/13/03 2/27/03 0.075 -- 4 5/15/03 5/29/03 0.070 -- 4 8/14/03 8/28/03 0.070 -- 4 ------ $0.301
* Percentage of each ordinary income distribution qualifying for the corporate dividend received tax deduction. ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND To Our Shareholders The economy is finally taking off. Most of the negative effects of the bursting of the Internet bubble in 2000 have washed through the financial markets and the economy. While we do not expect the kind of Gross Domestic Product (GDP) growth (7.2%) reported in the third quarter to continue, we do see GDP growth near 4% for 2004. Sustained growth at 4% would expand job creation and increase corporate profits. It also should help the equity markets, but may cause the bond market to falter as interest rates would be unlikely to drop and could rise. The Fund's strategy since 1986 has been to be an equity investment that uses convertible securities to reduce risk and volatility. This strategy tends to outperform in bear markets and lag in bull markets. The Fund's overall performance for long cycles was rewarded by winning the 2002 Lipper Performance Achievement Certificates for five and ten years within its category of closed-end convertible funds through December 2002. The category of closed-end convertible funds followed by Lipper, Inc. is made up of ten funds (eight for five years and seven for ten years). For the calendar year 2003 through October 31, 2003, the Fund's performance has lagged its peers as we may have moved into a new bull market. The open-end mutual fund industry has been caught up in a financial scandal involving market timing and late trading, which may adversely affect long-term investors in the funds implicated in the scandal. The publicly-traded closed-end fund format prevents the kind of trading activity at the center of the scandal from affecting the assets or diluting the interests of the shareholders in closed-end funds. Readers should note this is another positive attribute of the closed-end fund structure. The Fund's website (www.ellsworthfund.com) contains press releases, dividend information and daily net asset values. The Closed-End Fund Association (www.cefa.com), of which the Fund is a member, is another source of information on many closed-end funds.* Based upon data through October 31, 2003, Morningstar** has rated the Fund's performance at four stars (above average) overall as measured on the "Quicktake Report" on their website. In addition, shareholders who wish to obtain a copy of the most recent report on the Fund issued by Standard and Poor's should contact us. At its October meeting the Board of Directors declared a dividend of 10.5 cents per share. The dividend consists of undistributed net investment income. This dividend will be payable on November 26, 2003 to shareholders of record on October 30, 2003. The 2004 annual meeting of shareholders will be held in Bonita Springs, Florida on February 14, 2004. Time and location will be included in the Proxy Statement, scheduled to be mailed to shareholders on December 29, 2003. All shareholders are welcome to attend and we hope to see you there. /s/ Thomas H. Dinsmore Thomas H. Dinsmore Chairman of the Board November 13, 2003 * The Closed-End Fund Association is solely responsible for the content of its website. ** Morningstar is a mutual fund analysis and statistical reporting service that reports on and rates most mutual funds. It is solely responsible for the content of its website. ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND Largest Investment Holdings by underlying common stock
Value % Total (Note 1) Net Assets -------- ---------- Washington Mutual, Inc.................................................................. $ 2,401,875 2.7% A financial services company that provides a diversified line of products and services to consumers and small to mid-sized businesses. Reinsurance Group of America, Inc....................................................... 2,360,000 2.6 Through its subsidiaries, provides life insurance and reinsurance of asset-intensive products and financial reinsurance in the United States, Canada and various international markets. Church & Dwight Co., Inc................................................................ 2,132,240 2.4 Produces sodium bicarbonate and sodium bicarbonate-based products. The Company sells its products primarily under the Arm & Hammer trademark, to consumers and to industrial customers and distributors. Ivax Corp............................................................................... 2,011,875 2.2 Researches, develops, manufactures and markets branded and generic pharmaceuticals in the United States and international markets. The Company also specializes in veterinary products and nutraceuticals. Lucent Technologies, Inc................................................................ 1,898,940 2.1 Designs, builds and delivers a wide range of public and private networks, communications systems and software, and data networking systems. The Company also designs, builds and delivers business telephone systems and microelectronic components. Travelers Property Casualty Corp........................................................ 1,835,200 2.0 Provides a broad range of insurance products and services for the commercial and consumer markets. School Specialty, Inc................................................................... 1,834,371 2.0 Distributes non-textbook educational supplies and furniture for grades pre-kindergarten through 12. New York Community Bancorp, Inc......................................................... 1,618,600 1.8 A holding company for New York Community Bank, a thrift, that operates through divisional banks in New York and New Jersey. ChevronTexaco Corp...................................................................... 1,537,500 1.7 Operates worldwide in oil and gas exploration, production, refining and marketing, and chemical manufacturing. (convertible from Devon Energy Corp. 4.90% and 4.95%, due 2008) The Interpublic Group of Companies, Inc. ............................................... 1,496,719 1.7 --------- --- An organization of advertising agencies and marketing service companies that operates globally in the sectors of advertising, independent media buying, direct marketing, marketing research and public relations. Total $19,127,320 21.2% =========== =====
ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND Major Industry Exposure
% Total Net Assets ---------- Financial & Insurance...................... 10.9% Pharmaceuticals............................ 9.8 Banking/Savings & Loan..................... 9.7 Retail..................................... 9.4 Telecommunications......................... 7.7 Health Care................................ 7.1 Energy..................................... 6.9 Technology................................. 6.8 Aerospace & Defense........................ 5.3 Entertainment.............................. 4.6 ----- Total...................................... 78.2% =====
Major Portfolio Changes by underlying common stock Six months ended September 30, 2003
ADDITIONS REDUCTIONS Church & Dwight Co., Inc. Analog Devices, Inc. Comverse Technology, Inc. Anixter International, Inc. Doral Financial Corp. General Mills, Inc. General Motors Corp. Medtronic, Inc. Level 3 Communications, Inc. Offshore Logistics, Inc. Omnicare, Inc. Oneok, Inc. (exchangeable from Omnicare Capital Trust I) Provident Financial Group, Inc. School Specialty, Inc. Prudential Financial, Inc. (exchangeable from Prudential Financial Capital Trust I) STMicroelectronics, N.V. Teva Pharmaceuticals Industries Ltd. STMicroelectronics, N.V. (exchangeable from Teva Pharm. Finance B.V.) UTStarcom, Inc. UTStarcom, Inc. WPP Group plc Vishay Intertechnology, Inc. Xerox Corp. The Williams Companies, Inc.
ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND Portfolio of Investments September 30, 2003
Principal Amount Identified Value or Shares Cost (Note 1) --------- ---- -------- ADVERTISING -- 3.8% $1,550,000 The Interpublic Group Cos., Inc. 1.80% 2004 cv. sub. notes (NR).......... $ 1,478,068 $ 1,496,719 1,000,000 Lamar Advertising Company 2.875% 2010 cv. sub. notes (B2)................ 980,625 908,125 1,000,000 Omnicom Group, Inc. 0% 2033 zero yield cv. notes 144A * (Baa1)........... 1,000,056 983,750 --------- ------- 3,458,749 3,388,594 --------- ------- AEROSPACE & DEFENSE -- 5.3% 1,500,000 The Goldman Sachs Group, Inc. 1.00% 2009 exch. equity-linked notes * (Aa3) (exch. for General Dynamics Corp. common stock).......... 1,629,062 1,394,355 750,000 L-3 Communications Holdings, Inc. 5.25% 2009 cv. sr. sub. notes 144A (Ba3)............................................................. 750,000 841,875 15,000 shs Northrop Grumman Corp. 7.25% equity units *,** (NR)...................... 1,603,732 1,467,000 20,000 shs RC Trust I 8.25% equity security units *,** (BB) (exch. for Raytheon Co. class B common stock).......................... 1,011,831 1,059,000 --------- --------- 4,994,625 4,762,230 --------- ------- AUTOMOTIVE -- 2.5% 40,000 shs General Motors Corp. 6.25% series C cv. sr. deb. (Baa1).................. 1,000,000 1,078,000 2,500,000 Lear Corp. 0% 2022 cv. sr. notes 144A (Ba1).............................. 1,053,040 1,210,938 --------- --------- 2,053,040 2,288,938 --------- ------- BANKING/SAVINGS & LOAN -- 9.7% 15,000 shs Commerce Capital Trust II 5.95% cv. trust pfd. 144A (Baa1) (exch. for Commerce Bancorp, Inc. common stock)........................ 750,000 857,813 5,000 shs Commerce Capital Trust II 5.95% cv. trust pfd. (Baa1) (exch. for Commerce Bancorp, Inc. common stock)........................ 268,438 285,938 4,000 shs Doral Financial Corp. 4.75% perpetual cumulative cv. pfd. 144A (BBB-).... 1,000,000 1,009,000 40,000 shs National Australia Bank Ltd. 7.875% exch. capital units (NR)............. 1,038,700 1,440,000 25,000 shs New York Community Bancorp, Inc. 6% BONUSES units (Ba1).................. 1,246,606 1,618,600 5,000 shs State Street Corp. 6.75% treasury backed ACES ** (NR).................... 1,022,600 1,112,935 35,000 shs Washington Mutual Capital Trust PIERS units 144A (Baa1) (exch. for Washington Mutual, Inc. common stock)....................... 1,773,125 1,868,125 10,000 shs Washington Mutual Capital Trust PIERS units (Baa1) (exch. for Washington Mutual, Inc. common stock)....................... 520,313 533,750 --------- ------- 7,619,782 8,726,161 --------- ------- CONSUMER GOODS -- 3.0% 2,000,000 Church & Dwight Co., Inc. 5.25% 2033 cv. sr. deb. 144A (B1).............. 2,000,000 2,132,240 20,000 shs Constellation Brands, Inc. dep. shs. representing 5.75% series A mandatory cv. pfd. ** (Ba2)............................................ 511,250 578,400 --------- ------- 2,511,250 2,710,640 --------- ------- DATA-PROCESSING SERVICES -- 2.3% 965,000 The BISYS Group, Inc. 4% 2006 cv. sub. notes 144A (NR)................... 959,375 936,050 285,000 The BISYS Group, Inc. 4% 2006 cv. sub. notes (NR)........................ 274,500 276,450 875,000 Pegasus Solutions, Inc. 3.875% 2023 cv. sr. notes 144A (NR).............. 880,781 878,281 --------- ------- 2,114,656 2,090,781 --------- ------- ENERGY -- 6.9% 12,500 shs Chesapeake Energy Corp. 6% cum. cv. pfd. 144A (B3)....................... 780,869 784,238 500,000 Devon Energy Corp. 4.90% 2008 cv. sub. deb. * (Baa2) (conv. into ChevronTexaco Corp. common stock).......................... 549,953 512,500 1,000,000 Devon Energy Corp. 4.95% 2008 cv. sub. deb. * (Baa2) (conv. into ChevronTexaco Corp. common stock).......................... 1,123,715 1,025,000
ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND Portfolio of Investments September 30, 2003 (continued)
Principal Amount Identified Value or Shares Cost (Note 1) --------- ---- -------- ENERGY -- continued $1,300,000 Kerr-McGee Corp. 5.25% 2010 cv. sub. deb. (Baa3)......................... $ 1,363,688 $ 1,362,010 30,000 shs Kerr-McGee Corp. 5.50% 2004 DECS ** (Baa3) (exch. for Devon Energy Corp. common stock)............................ 995,625 1,297,200 20,000 shs The Williams Cos., Inc. 5.50% 2033 jr. sub. cv. deb. 144A (B-)........... 1,015,000 1,205,000 --------- --------- 5,828,850 6,185,948 --------- --------- ENTERTAINMENT -- 4.6% 500,000 Alloy, Inc. 5.375% 2023 cv. sr. deb. (NR)................................ 511,875 497,500 22,500 shs Emmis Communications Corp. 6.25% series A cum. cv. pfd. (Caa1)........... 919,590 975,938 2,500,000 News America, Inc. 0% 2021 LYONs 144A (Baa3) (exch. for ADSs representing The News Corp. Limited common stock)...... 1,370,613 1,376,125 1,250 shs Radio One, Inc. 6.50% HIGH TIDES (B3).................................... 1,280,844 1,257,342 --------- --------- 4,082,922 4,106,905 --------- --------- FINANCIAL & INSURANCE -- 10.9% 27,800 shs Capital One Financial Corp. 6.25% Upper DECS *,** (Baa3)................. 1,421,319 1,262,676 34,000 shs The Chubb Corp. 7% equity units *,** (A1)................................ 874,888 943,500 40,000 shs Platinum Underwriters Holdings, Ltd. 7% eq. sec. units *,** (NR)......... 1,120,250 1,179,600 40,000 shs Reinsurance Group of America, Inc. 5.75% PIERS (Baa2).................... 2,000,000 2,360,000 1,000,000 Swiss Re America Holding Corp. 3.25% 2021 euro. sub. cv. bonds 144A (Aa1) (conv. into Swiss Reinsurance Company common stock)......... 1,007,875 948,750 80,000 shs Travelers Property Casualty Corp. 4.50% 2032 cv. jr. sub. notes (A3)..... 1,965,055 1,835,200 1,500,000 XL Capital, Ltd. 0% 2021 cv. deb. 144A * (A1)............................ 1,077,859 955,905 500,000 XL Capital, Ltd. 0% 2021 cv. deb. * (A1)................................. 365,930 318,635 --------- --------- 9,833,176 9,804,266 --------- --------- HEALTH CARE -- 7.1% 750,000 AmerisourceBergen Corp. 5% 2007 cv. sub. notes 144A (B1)................. 778,048 890,100 1,000,000 Community Health Systems, Inc. 4.25% 2008 cv. sub. notes (B3)............ 988,600 1,001,250 500,000 Health Management Associates, Inc. 1.50% 2023 cv. sr. notes * (BBB+)..... 498,401 529,375 500,000 LifePoint Hospitals, Inc. 4.50% 2009 cv. sub. notes 144A (B3)............ 500,000 476,875 500,000 LifePoint Hospitals, Inc. 4.50% 2009 cv. sub. notes (B3)................. 490,000 476,875 19,000 shs Omnicare Capital Trust I 4% PIERS * (Ba3) (exch. for Omnicare, Inc. common stock)................................ 1,009,466 1,068,750 500,000 Province Healthcare Company 4.25% 2008 cv. sub. notes 144A (B3).......... 457,500 461,250 500,000 Province Healthcare Company 4.25% 2008 cv. sub. notes (B3)............... 450,000 461,250 600,000 Sunrise Assisted Living, Inc. 5.25% 2009 cv. sub. notes 144A (B1)........ 585,938 597,000 400,000 Sunrise Assisted Living, Inc. 5.25% 2009 cv. sub. notes (B1)............. 400,000 398,000 --------- --------- 6,157,953 6,360,725 --------- --------- OFFICE EQUIPMENT -- 1.6% 1,500,000 IOS Capital, LLC 5% 2007 cv. sub. notes 144A (Ba2) (exch. for IKON Office Solutions, Inc. common stock)................... 1,498,125 1,395,000 --------- --------- PAPER & PAPER PRODUCTS -- 1.4% 25,000 shs Temple-Inland, Inc. 7.50% Upper DECS *,** (Baa3)......................... 1,237,808 1,221,250 --------- ---------
ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND Portfolio of Investments September 30, 2003 (continued)
Principal Amount Identified Value or Shares Cost (Note 1) --------- ---- -------- PHARMACEUTICALS -- 9.8% $1,000,000 Amgen, Inc. 0% 2032 LYONS * (A2)......................................... $ 783,866 $ 769,410 21,500 shs Baxter International, Inc. 7% equity units *,** (A3)..................... 962,396 1,134,125 750,000 Cephalon, Inc. 2.50% 2006 cv. sub. notes 144A (B-)....................... 739,375 709,688 250,000 Cephalon, Inc. 2.50% 2006 cv. sub. notes (B-)............................ 223,750 236,563 1,000,000 Gilead Sciences, Inc. 2% 2007 cv. sr. notes 144A (NR).................... 1,119,388 1,335,000 250,000 Guilford Pharmaceuticals, Inc. 5% 2008 cv. sub. notes 144A (NR).......... 250,000 298,278 500,000 Ivax Corp. 4.50% 2008 cv. sr. sub. notes (NR)............................ 495,000 485,625 1,500,000 Ivax Corp. 5.50% 2007 cv. sr. sub. notes (NR)............................ 1,493,125 1,526,250 18,300 shs Johnson & Johnson common stock........................................... 1,025,715 906,216 1,000,000 Teva Pharmaceutical Finance B.V. 0.75% 2021 cv. sub. deb. (BBB-) (exch. for Teva Pharmaceuticals Industries Ltd. ADRs).................. 1,208,750 1,375,000 --------- --------- 8,301,365 8,776,155 --------- --------- RETAIL -- 9.4% 500,000 Barnes & Noble, Inc. 5.25% 2009 cv. sub. notes (Ba3)..................... 497,975 513,125 500,000 Brinker International, Inc. 0% 2021 cv. sr. deb. (Baa2).................. 325,232 341,550 1,250,000 Charming Shoppes, Inc. 4.75% 2012 sr. cv. notes 144A (B2)................ 1,285,431 1,165,625 250,000 Charming Shoppes, Inc. 4.75% 2012 sr. cv. notes (B2)..................... 197,813 233,125 2,000,000 Costco Wholesale Corp. 0% 2017 cv. sub. notes (A3)....................... 1,707,094 1,452,280 500,000 Dave & Buster's, Inc. 5% 2008 cv. sub. notes Reg. D with warrants attached (NR)............................................ 500,000 500,000 1,225,000 Duane Reade, Inc. 2.148% 2022 cv. sr. notes 144A (Ba3)................... 730,061 633,172 750,000 J.C. Penney, Inc. 5% 2008 cv. sub. notes (B1)............................ 752,875 768,750 550,000 School Specialty, Inc. 6% 2008 cv. sub. notes 144A (B+).................. 560,000 587,428 250,000 School Specialty, Inc. 6% 2008 cv. sub. notes (B+)....................... 258,100 267,013 1,000,000 School Specialty, Inc. 3.75% 2023 cv. sub. notes * (B+).................. 1,009,005 979,930 25,000 shs Toys "R" Us, Inc. 6.25% equity securities units *,** (NR)................ 1,090,599 982,500 --------- ------- 8,914,185 8,424,498 --------- --------- TECHNOLOGY -- 6.8% 250,000 Affiliated Computer Services, Inc. 3.50% 2006 cv. sub. notes 144A (Baa2)............................................................ 251,563 298,550 1,000,000 Affiliated Computer Services, Inc. 3.50% 2006 cv. sub. notes (Baa2)...... 1,184,125 1,194,200 750,000 Hutchinson Technology, Inc. 2.25% 2010 cv. sub. notes 144A (NR).......... 816,683 967,458 500,000 Kulicke & Soffa Industries, Inc. 4.75% 2006 cv. sub. notes (Caa2)........ 481,875 442,500 1,000,000 Mercury Interactive Corp. 4.75% 2007 cv. sub. notes (NR)................. 991,250 989,000 1,000,000 STMicroelectronics, N.V. 0% 2013 sr. cv. bonds 144A # (A-)............... 1,000,000 1,046,250 1,000,000 Vishay Intertechnology, Inc. 3.625% 2023 cv. sub. notes 144A (B2)........ 1,166,952 1,187,370 --------- --------- 5,892,448 6,125,328 --------- --------- TELECOMMUNICATIONS -- 7.7% 550,000 Commonwealth Telephone Enterprises, Inc. 3.25% 2023 cv. notes * (NR)........................................................ 572,664 562,375 750,000 Comverse Technology, Inc. 0% 2023 ZYPS 144A # (BB-)...................... 750,000 808,125 250,000 Comverse Technology, Inc. 0% 2023 ZYPS # (BB-)........................... 285,000 269,375 27,700 The Goldman Sachs Group, Inc. 7.30% mandatory exch. notes ** (Aa3) (exch. for Verizon Communications, Inc. common stock)............ 999,970 904,488 1,000,000 Level 3 Communications, Inc. 2.875% 2010 cv. sub. notes (Caa2)........... 1,000,000 993,630 1,000,000 Lucent Technologies, Inc. 2.75% 2023 series A cv. sr. deb. (Caa1)........ 1,000,000 936,920 1,000,000 Lucent Technologies, Inc. 2.75% 2025 series B cv. sr. deb. (Caa1)........ 1,000,000 962,020 750,000 Tekelec, Inc. 2.25% 2008 cv. sub. discount notes 144A (NR)............... 756,719 825,938 20,000 shs UTStarcom, Inc. common stock............................................. 732,740 636,000 --------- --------- 7,097,093 6,898,871 --------- ---------
ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND Portfolio of Investments September 30, 2003 (continued)
Principal Amount Identified Value or Shares Cost (Note 1) --------- ---- -------- TRANSPORTATION -- 2.1% $ 750,000 Continental Airlines, Inc. 4.50% 2007 cv. notes (Caa2).................. $ 750,000 $ 613,950 250,000 ExpressJet Holdings, Inc. 4.25% 2023 cv. notes (NR)..................... 250,000 264,499 1,000,000 United Parcel Service, Inc. 1.75% 2007 cash-settled cv. sr. notes (Aaa)................................................... 980,000 1,001,250 ---------- ----------- 1,980,000 1,879,699 ---------- ----------- UTILITIES -- 2.5% 30,000 shs American Electric Power Co., Inc. 9.25% equity units *,** (Baa3)........ 1,488,361 1,336,500 35,000 shs DTE Energy Co. 8.75% equity security units *,** (BBB)................... 885,786 885,500 ---------- ----------- 2,374,147 2,222,000 ---------- ----------- SHORT-TERM SECURITIES -- 0.0% 11,000 U.S. Treasury notes 3.375% 4/30/04 + (Aaa).............................. 11,244 11,151 Total Convertible Bonds and Notes-- 58.2%............................... 52,397,298 52,283,405 Total Convertible Preferred Stocks-- 20.3%.............................. 16,568,006 18,177,694 Total Mandatory Convertible Securities-- 17.1%.......................... 15,226,415 15,364,674 Total Common Stocks-- 1.7%.............................................. 1,758,455 1,542,216 Total Short-Term Securities-- 0.0%...................................... 11,244 11,151 ---------- ----------- Total Investments-- 97.3%............................................... $85,961,418 87,379,140 =========== ----------- Other assets and liabilities, net-- 2.7%................................ 2,422,050 ----------- Total Net Assets-- 100.0%............................................... $89,801,190 ===========
* Contingent payment debt instrument which accrues contingent interest. See Note 1(b). ** Mandatory convertible. See Note 1(e). # Non-income producing security. + Collateral for a letter of credit. ACES Automatic Convertible Equity Securities. ADR American Depositary Receipts. ADS American Depositary Shares. BONUSES Bifurcated Option Note Unit Securities. DECS Debt Exchangeable for Common Stock. HIGH TIDES Remarketable Term Income Deferrable Equity Securities. LYONs Liquid Yield Option Notes. PIERS Preferred Income Equity Redeemable Securities. ZYPS Zero Yield Puttable Securities. Ratings in parentheses by Moody's Investors Service, Inc. or Standard & Poor's, a division of McGraw-Hill Companies, Inc., have been obtained from sources believed reliable but have not been examined by PricewaterhouseCoopers LLP. NR is used whenever a rating is unavailable. The cost of investments for federal income tax purposes is $85,961,418 resulting in gross unrealized appreciation and depreciation of $4,191,498 and $2,773,776, respectively, or net unrealized appreciation of $1,417,722 on a tax cost basis. See accompanying notes to financial statements ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND Statement of Assets and Liabilities
September 30, 2003 ------------------ Assets: Investments at value (cost $85,961,418) (Note 1)....................... $87,379,140 Cash................................................................... 1,329,713 Receivable for securities sold......................................... 2,259,190 Dividends and interest receivable...................................... 472,750 Other assets........................................................... 74,968 ----------- Total assets........................................................... 91,515,761 ----------- Liabilities: Payable for securities purchased....................................... 1,672,755 Accrued management fee (Note 2)........................................ 6,414 Accrued expenses....................................................... 25,378 Other liabilities...................................................... 10,024 ----------- Total liabilities...................................................... 1,714,571 ----------- Net Assets............................................................... $89,801,190 =========== Net assets consist of: Undistributed net investment income.................................... $ 1,001,377 Accumulated net realized loss from investment transactions............. (8,158,982) Unrealized appreciation on investments................................. 1,417,722 Capital shares (Note 3)................................................ 104,620 Additional paid-in capital............................................. 95,436,453 ----------- Net Assets............................................................... $89,801,190 =========== Net asset value per share ($89,801,190 [divided by] 10,461,994 outstanding shares)...................................................... $ 8.58 ===========
Statement of Operations For the Year Ended September 30, 2003 Investment Income (Note 1): Interest..................................................... $ 2,518,052 Dividends.................................................... 1,898,327 ----------- Total Income................................................. 4,416,379 ----------- Expenses (Note 2): Management fee............................................... 642,604 Custodian.................................................... 27,841 Transfer agent............................................... 24,693 Professional fees............................................ 83,725 Directors' fees.............................................. 107,700 Reports to shareholders...................................... 41,408 Treasurer's office........................................... 25,000 Other........................................................ 88,134 ----------- Total Expenses............................................. 1,041,105 ----------- Net Investment Income.......................................... 3,375,274 ----------- Realized and Unrealized Loss on Investments: Net realized loss from investment transactions............... (442,388) Net unrealized appreciation of investments................... 8,367,818 ----------- Net gain on investments...................................... 7,925,430 ----------- Net Increase in Net Assets Resulting from Operations........... $11,300,704 ===========
See accompanying notes to financial statements ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND Statement of Changes in Net Assets For the Years Ended September 30, 2003 and 2002
2003 2002 ---- ---- Change in net assets from operations: Net investment income.............................................. $ 3,375,274 $ 3,487,906 Net realized loss from investment transactions..................... (442,388) (6,659,001) Net change in appreciation of investments.......................... 8,367,818 (1,273,567) ----------- ----------- Net change in net assets resulting from operations............... 11,300,704 (4,444,662) ----------- ----------- Dividends to shareholders from: Net investment income.............................................. (3,143,201) (4,547,101) Capital share transactions (Note 3).................................. 518,366 1,216,444 ----------- ----------- Change in net assets................................................. 8,675,869 (7,775,319) Net assets at beginning of year...................................... 81,125,321 88,900,640 ----------- ----------- Net assets at end of year (including undistributed net investment income of $1,001,377 and $800,703, respectively)..................... $89,801,190 $81,125,321 =========== ===========
Financial Highlights Selected data for a share of common stock outstanding:
Years Ended September 30, -------------------------------------------------------------- 2003 2002 2001 2000 1999 ---- ---- ---- ---- ---- Operating Performance: Net asset value, beginning of year.............. $ 7.81 $ 8.67 $ 11.82 $ 11.23 $ 11.18 ------- ------- ------- -------- ------- Net investment income........................... .32 .34 .47 .42 .33 Net realized and unrealized gain (loss)......... .75 (.76) (1.88) 1.71 1.40 ------- ------- ------- -------- ------- Total from investment operations.............. 1.07 (.42) (1.41) 2.13 1.73 Less Distributions: Dividends from net investment income............ (.30) (.44) (.42) (.35) (.32) Distributions from realized gains............... -- -- (1.32) (1.23) (1.36) ------- ------- ------- -------- ------- Total distributions........................... (.30) (.44) (1.74) (1.58) (1.68) Capital share repurchases....................... -- -- -- .04 -- ------- ------- ------- -------- ------- Net asset value, end of year.................... $ 8.58 $ 7.81 $ 8.67 $ 11.82 $ 11.23 ======= ======= ======= ======== ======= Market value, end of year....................... $ 8.05 $ 7.55 $ 8.35 $ 9.88 $ 9.38 Total Net Asset Value Return (%)(a)............. 14.0 (5.2) (13.3) 21.9 16.4 Total Investment Return (%)(b)................. 10.8 (4.5) 2.2 25.7 10.4 Ratios/Supplemental Data: Net assets, end of year ($000's)................ $89,801 $81,125 $88,901 $109,180 $96,040 Ratio of expenses to average net assets (%)..... 1.2 1.2 1.2 1.2 1.1 Ratio of net investment income to average net assets (%)........................ 3.9 3.9 5.0 3.8 3.0 Portfolio turnover rate (%)..................... 86 89 82 98 67
- ------------- (a) Assumes valuation of the Fund's shares, and reinvestment of dividends, at net asset values. (b) Assumes valuation of the Fund's shares at market price and reinvestment of dividends at actual reinvestment price. See accompanying notes to financial statements ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND Notes to Financial Statements 1. Significant Accounting Policies Ellsworth Convertible Growth and Income Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940 as a diversified, closed-end management investment company. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements: (a) Security Valuation Investments in securities traded on a national securities exchange are valued at market using the last reported sales price as of the close of regular trading. Securities traded in the over-the-counter market and listed securities for which no sales were reported are valued at the mean between reported bid and asked prices as of the close of regular trading. Where no closing prices are available, value is determined by management, with the approval of the Board of Directors. (b) Securities Transactions and Related Investment Income Security transactions are accounted for on the trade date (date the order to buy or sell is executed) with gain or loss on the sale of securities being determined based upon identified cost. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis, including accretion of discounts and amortization of non-equity premium. For certain securities, known as "contingent payment debt instruments," Federal tax regulations require the Fund to record non-cash, "contingent" interest income in addition to interest income actually received. Contingent interest income amounted to 5 cents per share for the year ended September 30, 2003. In addition, Federal tax regulations require the Fund to reclassify realized gains on contingent payment debt instruments to interest income. At September 30, 2003 there were unrealized losses of approximately 1 cent per share on contingent payment debt instruments. (c) Federal Income Taxes It is the policy of the Fund to distribute substantially all of its taxable income within the prescribed time and to otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. Therefore, no provision for federal income or excise taxes is believed necessary. (d) Dividends and Distributions to Shareholders The liability for dividends and distributions payable is recorded on the ex-dividend date. (e) Market Risk It is the Fund's policy to invest the majority of its assets in convertible securities. Although convertible securities do derive part of their value from that of the securities into which they are convertible, they are not considered derivative financial instruments. However, certain of the Fund's investments include features which render them more sensitive to price changes in their underlying securities. Thus they expose the Fund to greater downside risk than traditional convertible securities, but still less than that of the underlying common stock. The market value of those securities was $15,364,674 at September 30, 2003, representing 17% of net assets. ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND Notes to Financial Statements (continued) 2. Management Fee and Other Transactions with Affiliates The management fee is paid to the investment adviser, Davis-Dinsmore Management Company (the "Adviser"). The contract provides for payment of a monthly advisory fee, computed at an annual rate of 3/4 of 1% of the first $100,000,000 and 1/2 of 1% of the excess over $100,000,000 of the Fund's net asset value in such month. The Adviser furnishes investment advice, office equipment and facilities, and pays the salaries of all executive officers of the Fund, except that the costs associated with personnel and certain non-personnel expenses of the office of the Treasurer, up to a maximum of $25,000 a year, are reimbursed by the Fund. Such reimbursements amounted to $25,000 for the year ended September 30, 2003. The officers of the Fund are also directors, officers or employees of the Adviser, and are compensated by the Adviser. 3. Capital Stock At September 30, 2003 there were 10,461,994 shares of $.01 par value common stock outstanding, (20,000,000 shares authorized). During the years ended September 30, 2003 and 2002, 68,117 shares and 137,918 shares were issued in connection with reinvestment of dividends from net investment income, resulting in an increase in paid-in capital of $518,366 and $1,216,444 respectively. A distribution of $.105 per share, derived from net investment income, was declared on October 20, 2003, payable November 26, 2003 to shareholders of record at the close of business October 30, 2003. The Board of Directors of the Fund has authorized the Fund to issue, to shareholders of record October 14, 2003, non-transferable rights to acquire additional shares of the Fund's common stock (the "Rights"). Shareholders received one Right for each whole share of common stock held as of October 14, 2003, rounded up to the nearest number of Rights evenly divisible by six. The Rights allow shareholders to subscribe for one share of the Fund's common stock for each six Rights held. The subscription price of the Rights will be the lesser of (a) 95% of the net asset value per share of the Fund's common stock on November 20, 2003, or (b) 95% of the average of the volume-weighted average sales prices of a share of the Fund's Common Stock on the American Stock Exchange on the November 20, 2003 and the four preceding trading days. Rights may be exercised at any time prior to 5:00 p.m., Eastern time, on November 19, 2003, unless extended by the Fund. 4. Portfolio Activity Purchases and sales of investments, exclusive of corporate short-term notes, aggregated $73,545,877 and $71,199,299, respectively, for the year ended September 30, 2003. ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND Notes to Financial Statements (continued) 5. Distributions to Shareholders Income and Capital Gain Distributions are determined in accordance with federal income tax regulations, which may differ from those reported for financial reporting purposes. The tax character of distributions paid during the years ended September 30, 2003 and 2002 were as follows: Ordinary Income $3,143,201 $4,547,101 Long-Term Capital Gain -- -- ---------- ---------- 3,143,201 4,547,101 ========== ========== At September 30, 2003 the components of net assets (excluding paid-in capital) on a tax basis were as follows: Undistributed ordinary income $ 1,001,377 Tax basis capital loss carryforward (7,719,727) Post October loss deferral (439,255) Unrealized (appreciation) 1,417,722 ----------- (5,739,883) =========== The capital loss carryforward represents tax basis capital losses which may be carried over to offset future realized capital gains. On September 30, 2003 the Fund had a net capital loss carry forward of $7,719,727, of which $1,057,592 expires in 2009, $1,029,388 expires in 2010, and $5,632,747 expires in 2011. To the extent that the carryforward is used, no capital gains distributions will be made. The Fund has elected to defer realized capital losses of $439,254 arising after October 31, 2002. Such losses are treated for tax purposes as arising on October 1, 2003. ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND Report of Independent Accountants To the Shareholders and Board of Directors of Ellsworth Convertible Growth and Income Fund, Inc. In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets, and the financial highlights, present fairly, in all material respects, the financial position of Ellsworth Convertible Growth and Income Fund, Inc. (the "Fund") at September 30, 2003, the results of its operations for the year then ended, and the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at September 30, 2003 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP New York, New York October 20, 2003 ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND Miscellaneous Notes Automatic Dividend Investment and Cash Payment Plan The Fund has an Automatic Dividend Investment and Cash Payment Plan (the "Plan"). Any shareholder may elect to join the Plan by sending an application to American Stock Transfer & Trust Company, P.O. Box 922, Church Street Station, NY 10269-0560 (the "Plan Agent"). You may also obtain additional information about the Plan by calling the Plan Agent toll free at (800) 937-5449. If your shares are held by a broker or other nominee, you should instruct the nominee to join the Plan on your behalf. Some brokers may require that your shares be taken out of the broker's "street name" and re-registered in your own name. Shareholders should also contact their broker to determine whether shares acquired through participation in the Plan can be transferred to another broker, and thereafter, whether the shareholder can continue to participate in the Plan. Under the Plan, all dividends and distributions are automatically invested in additional Fund shares. Depending on the circumstances, shares may either be issued by the Fund or acquired through open market purchases at the current market price or net asset value, whichever is lower (but not less than 95% of market price). When the market price is lower, the Plan Agent will combine your dividends with those of other Plan participants and purchase shares in the market, thereby taking advantage of the lower commissions on larger purchases. There is no other charge for this service. All dividends and distributions made by the Fund (including capital gain dividends and dividends designated as qualified dividend income, which are eligible for taxation at lower rates) remain taxable to Plan participants, regardless of whether such dividends and distributions are reinvested in additional shares of the Fund through open market purchases or through the issuance of new shares. Plan participants will be treated as receiving the cash used to purchase shares on the open market and, in the case of any dividend or distribution made in the form of newly issued shares, will be treated as receiving an amount equal to the fair market value of such shares as of the reinvestment date. Accordingly, a shareholder may incur a tax liability even though such shareholder has not received a cash distribution with which to pay the tax. Plan participants may also voluntarily send cash payments of $100 to $10,000 per month to the Plan Agent, to be combined with other Plan monies, for purchase of additional Fund shares in the open market. You pay only a bank service charge of $1.25 per transaction, plus your proportionate share of the brokerage commission. All shares and fractional shares purchased will be held by the Plan Agent in your dividend reinvestment account. You may deposit with the Plan Agent any Ellsworth stock certificates you hold, for a one-time fee of $7.50. At any time, a Plan participant may instruct the Plan Agent to liquidate all or any portion of such Plan participant's account. To do so, a Plan participant must deliver written notice to the Plan Agent prior to the record date of any dividend or distribution requesting either liquidation or a stock certificate. The Plan Agent will combine all liquidation requests it receives from Plan participants on a particular day and will then sell shares of the Fund that are subject to liquidation requests in the open market. The amount of proceeds a Plan participant will receive shall be determined by the average sales price per share, after deducting brokerage commissions, of all shares sold by the Plan Agent for all Plan participants who have given the Plan Agent liquidation requests. The Plan Agent or the Fund may terminate the Plan for any reason at any time by sending written notice addressed to Plan participant's address as shown on the Plan Agent's records. Following the date of termination, the Plan Agent shall send the Plan participant either the proceeds of liquidation, or a stock certificate or certificates for the full shares held by Plan Agent in Plan participant's account and a check for the value of any fractional interest in Plan participant's account based on the market price of the Fund's Common Stock on that date. ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND Miscellaneous Notes (continued) Notice of Privacy Policy The Fund has adopted a privacy policy in order to protect the confidentiality of nonpublic personal information that we have about you. We receive personal information, such as your name, address and account balances, when transactions occur in Ellsworth shares registered in your name. We may disclose this information to companies that perform services for the Fund, such as the Fund's transfer agent or proxy solicitors. These companies may only use this information in connection with the services they provide to the Fund, and not for any other purpose. We will not otherwise disclose any nonpublic personal information about our stockholders or former stockholders to anyone else, except as required by law. Access to nonpublic information about you is restricted to our employees and service providers who need that information in order to provide services to you. We maintain physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information. - -------------------------------------------------------------------------------- Visit us on the Internet at www.ellsworthfund.com. The site provides information about the Fund including daily net asset values (NAV), historical dividends and press releases, as well as information about Davis-Dinsmore Management Company, the Fund's adviser. In addition you can email us at info@ellsworthfund.com. - -------------------------------------------------------------------------------- The Fund is a member of the Closed-End Fund Association (CEFA). Its website address is www.cefa.com. CEFA is solely responsible for the content of its website. - -------------------------------------------------------------------------------- The Fund's Proxy Voting Guidelines (the "Guidelines") are available without charge, by calling the Fund collect at (973) 631-1177. The Guidelines are also posted on the Fund's website at http://www.ellsworthfund.com and are available on the SEC's website at http://www.sec.gov. - -------------------------------------------------------------------------------- Pursuant to Section 23 of the Investment Company Act of 1940, notice is hereby given that the Fund may in the future, purchase shares of its own Common Stock from time to time, at such times, and in such amounts, as may be deemed advantageous to the Fund. Nothing herein shall be considered a commitment to purchase such shares. - -------------------------------------------------------------------------------- A Statement of Additional Information, dated October 16, 2003, which pertains to an offering of the Fund's Common Stock issuable upon exercise of rights that were issued to existing shareholders of the Fund on October 14, 2003, contains additional information about the Fund and Directors, and is available, without charge, by calling the Fund collect at (973) 631-1177. - -------------------------------------------------------------------------------- Internet Shareholder Services and Transfer Agent www.ellsworthfund.com American Stock Transfer & Trust Company email: info@ellsworthfund.com 59 Maiden Lane New York, NY 10038 Investment Adviser (800) 937-5449 Davis-Dinsmore Management Company www.amstock.com 65 Madison Avenue, Suite 550 Morristown, NJ 07960-7308 Common Stock Listing (973) 631-1177 American Stock Exchange Symbol: ECF ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND Directors The business address of each director is 65 Madison Avenue, Suite 550, Morristown, NJ 07960-7308. Each director is also a director of Bancroft Convertible Fund, Inc. (Bancroft) (a closed-end management investment company). Davis-Dinsmore Management Company (Davis-Dinsmore) is the Fund's investment adviser and is also the investment adviser to Bancroft. Because of this connection, the Fund and Bancroft make up a Fund Complex. Therefore, each director oversees two investment companies in the Fund Complex.
- ------------------------------------------------------------------------------------------------------------------------ Term of Office and Length of Principal Occupation(s) During Other Directorship(s) Name and Age Time Served Past 5 Years Held by Director - ------------------------------------------------------------------------------------------------------------------------ Independent Directors Gordon F. Ahalt, 75 Term as Director Retired. Prior to 2001, CalDive International, expires 2004. President of G.F.A. Inc. (petroleum and The Houston Director since industry consulting company). Prior to Exploration Company 1986. 1999, Consultant with W.H. Reaves & Co. (asset management company). William A. Benton, 70 Term as Director Retired. Prior to 2001, Partner of BE None expires 2004. Partners (small options market maker). Director since Prior to 2000, Limited Partner of 1986. Gavin, Benton & Co. (NYSE specialist). Elizabeth C. Bogan, Ph.D., 59 Term as Director Senior Lecturer in Economics at None expires 2004. Princeton University. Director since 1986. Donald M. Halsted, Jr., 76 Term as Director Retired Business Executive. None expires 2005. Director since 1986. George R. Lieberman, 81 Term as Director Retired Advertising Executive. None expires 2006. Director since 1990. Duncan O. McKee, 72 Term as Director Retired Attorney. None expires 2005. Director since 1996. Nicolas W. Platt, 50 Term as Director Since January 2003, President of None expires 2004. CNC-US (an international consulting Director since company). Prior to January 2003, 1997. Senior Partner of Platt & Rickenbach (public relations firm). Prior to May 2001, with WPP Group, UK, as Exec. Vice Pres. of Ogilvy Public Relations Worldwide and Managing Director of the Corporate Financial Practice at Burson-Marsteller (public relations firm).
ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND Directors (continued)
- ------------------------------------------------------------------------------------------------------------------------ Term of Office and Length of Principal Occupation(s) During Other Directorship(s) Name and Age Time Served Past 5 Years Held by Director - ------------------------------------------------------------------------------------------------------------------------ Interested Directors Thomas H. Dinsmore, 50 (1,2) Term as Director Chairman and Chief Executive Officer None expires 2005. of the Fund, Bancroft and Director since Davis-Dinsmore. 1986. Jane D. O'Keeffe, 48 (1,2) Term as Director President of the Fund, Bancroft and None expires 2005. Davis-Dinsmore. Director since 1995.
Officers The business address of each officer is 65 Madison Avenue, Suite 550, Morristown, NJ 07960-7308. Officers are elected and serve at the pleasure of the Board of Directors. Each officer holds office until the annual meeting to be held in 2004, and thereafter until his or her respective successor is duly elected and qualified.
- ------------------------------------------------------------------------------------------------------------------------ Principal Occupation(s) Name and Age Positions with the Fund Officer Since During the Past 5 Years - ------------------------------------------------------------------------------------------------------------------------ Thomas H. Dinsmore, 50 (1,2) Director, Chairman and 1986 Chairman and Chief Executive Chief Executive Officer Officer of the Fund, Bancroft and Davis-Dinsmore Jane D. O'Keeffe, 48 (1,2) Director and President 1994 President of the Fund, Bancroft and Davis-Dinsmore H. Tucker Lake, Jr., 56 (2) Vice President 1994 Since 2002, Vice President, and prior thereto Vice President, Trading, of the Fund, Bancroft and Davis-Dinsmore Gary I. Levine, 46 (3,4) Vice President, 1993 Since 2002, Vice President, Treasurer and Chief Treasurer and Chief Financial Financial Officer Officer, and prior thereto, Treasurer and Assistant Secretary of the Fund, Bancroft and Davis-Dinsmore Germaine Ortiz, 33 Vice President 1996 Since 1999, Vice President, and prior thereto, Assistant Vice President of the Fund, Bancroft and Davis-Dinsmore Sigmund Levine, 79 (3,5) Secretary 1986 Senior Vice President and Secretary of the Fund, Bancroft and Davis-Dinsmore
1 Mr. Dinsmore and Ms. O'Keeffe are considered interested persons because they are officers and directors of Davis-Dinsmore. They are brother and sister. 2 H. Tucker Lake, Jr. is the cousin of Thomas H. Dinsmore and Jane D. O'Keeffe. 3 Sigmund Levine is the father of Gary I. Levine. 4 Gary I. Levine was elected Secretary of the Fund as of November 17, 2003. 5 Sigmund Levine retired as Secretary of the Fund as of November 17, 2003. ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND, INC. 65 MADISON AVENUE, SUITE 550 MORRISTOWN, NEW JERSEY 07960 www.ellsworthfund.com [LOGO] [LOGO] Printed on recycled paper ITEM 2. CODE OF ETHICS. Effective May 15, 2003, the Board of Directors of the Fund has adopted a code of ethics that applies to the Fund's principal executive officer and principal financial officer. See attached Exhibit EX-99.CODE ETH. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The Board of Directors of the Fund has determined that no member of the Board serving on the Audit Committee meets the SEC definition of "audit committee financial expert." The Fund's Audit Committee consists of four directors who are not "interested persons" of the Fund within the meaning of the Investment Company Act of 1940, as amended. These directors are also "independent" from the Funds within the meaning of Section 10A of the Securities Exchange Act of 1934, as amended. Members of the Audit Committee have diverse backgrounds in manufacturing, finance, advertising and education, and the Board believes that such members are fully qualified to monitor the internal accounting operations and the independent auditors of the Fund, and to monitor the disclosures of the Fund contained in the Fund's financial statements. In addition, the Audit Committee has the ability on its own to retain independent accountants or other consultants whenever it deems appropriate. The Fund's Board believes that all of the foregoing is equivalent to having an audit committee financial expert on the Audit Committee. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Form N-CSR disclosure requirement not yet effective with respect to the registrant. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. (a) The Fund has a designated Audit Committee in accordance with Section 3(a)(58)(A) of the Exchange Act: WILLIAM A. BENTON ELIZABETH C. BOGAN, PH.D. DONALD M. HALSTED, JR. GEORGE R. LIEBERMAN (b) Not applicable. ITEM 6. [RESERVED BY SEC FOR FUTURE USE.] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Bancroft Convertible Fund, Inc. Ellsworth Convertible Growth and Income Fund, Inc. Davis-Dinsmore Management Company Proxy Voting Guidelines (Adopted April 14, 2003) These proxy voting guidelines have been adopted by the Boards of Directors of Bancroft Convertible Fund, Inc. and Ellsworth Convertible Growth and Income Fund, Inc. (collectively, the "Funds"), as well as by the Board of Directors of Davis-Dinsmore Management Company ("Davis-Dinsmore"). The Boards of Directors of the Funds have delegated to Davis-Dinsmore responsibility for voting proxies received by the Funds in their capacities as shareholders of various companies. The Boards recognize that, due to the nature of the Funds' investments, the Funds do not frequently receive proxies. Davis-Dinsmore exercises its voting responsibility with the overall goal of maximizing the value of the Funds' investments. The portfolio managers at Davis-Dinsmore oversee the voting policies and decisions for the Funds. In evaluating voting issues, the portfolio managers may consider information from many sources, including management of a company presenting a proposal, shareholder groups, research analysts, and independent proxy research services. Set forth below are the proxy voting guidelines: A. Matters Related to the Board of Directors 1. The Funds generally will support the election of nominees recommended by management for election as directors. In determining whether to support a particular nominee, Davis-Dinsmore will consider whether the election of that nominee will cause a company to have less than a majority of independent directors. 2. The Funds generally will support proposals to de-classify boards of directors if fewer than 66 2/3 of the directors are independent, and will generally vote against proposals to classify boards of directors. 3. The Funds generally will withhold a vote in favor of a director who has served on a committee which has approved excessive compensation arrangements or proposed equity-based compensation plans that unduly dilute the ownership interests of stockholders. B. Matters Related to Independent Auditors 1. The Funds generally will vote in favor of independent accountants approved by the company. Prior to such vote, however, Davis-Dinsmore will take into consideration whether non-audit fees make up more than 50 to 75% of the total fees paid by the company to the independent auditors, and the nature of the non-audit services provided. C. Corporate Governance Matters 1. As a general rule, the Funds will vote against proposals recommended by management of a company that are being made primarily to implement anti- takeover measures, and will vote in favor of proposals to eliminate policies that are primarily intended to act as anti-takeover measures. 2. Subject to the other provisions of these guidelines, including without limitation provision C.1. above, the Funds generally will vote in accordance with management's recommendations regarding routine matters, including the following: a. Fixing number of directors; b. Stock splits; and c. Change of state of incorporation for specific corporate purposes. D. Matters Related to Equity-Based Compensation Plans 1. The Fund generally will vote in favor of broad-based stock option plans for executives, employees or directors which would not increase the aggregate number of shares of stock available for grant under all currently active plans to over 10% of the total number of shares outstanding. 2. The Funds generally will vote in favor of employee stock purchase plans and employee stock ownership plans permitting purchase of company stock at 85% or more of fair market value. E. Contested Matters 1. Contested situations will be evaluated on a case by case basis by the portfolio manager at Davis-Dinsmore principally responsible for the particular portfolio security. F. Miscellaneous Matters 1. The Funds may in their discretion abstain from voting shares that have been recently sold. 2. The Funds generally will abstain from voting on issues relating to social and/or political responsibility. 3. Proposals that are not covered by the above-stated guidelines will be evaluated on a case by case basis by the portfolio manager at Davis-Dinsmore principally responsible for the particular portfolio security. G. Material Conflicts of Interest 1. Conflicts of interest may arise from time to time between Davis- Dinsmore and the Funds. Examples of conflicts of interests include: a. Davis-Dinsmore may manage a pension plan, administer employee benefit plans, or provide services to a company whose management is soliciting proxies; b. Davis-Dinsmore or its officers or directors may have a business or personal relationship with corporate directors, candidates for directorships, or participants in proxy contests; c. Davis-Dinsmore may hold a position in a security contrary to shareholder interests. 2. If a conflict of interest arises with respect to a proxy voting matter, the portfolio manager will promptly notify the Funds' Audit Committee and counsel for independent directors and the proxies will be voted in accordance with direction received from the Audit Committee. ITEM 8. [RESERVED BY SEC FOR FUTURE USE.] ITEM 9. CONTROLS AND PROCEDURES Conclusions of principal officers concerning controls and procedures (a) As of November 21, 2003, an evaluation was performed under the supervision and with the participation of the officers of Ellsworth Convertible Growth and Income Fund, Inc. (the "Company"), including the principal executive officer ("PEO") and principal financial officer ("PFO"), of the effectiveness of the Company's disclosure controls and procedures. Based on that evaluation, the Company's officers, including the PEO and PFO, concluded that, as of November 21, 2003, the Company's disclosure controls and procedures were reasonably designed so as to ensure that material information relating to the Company is made known to the PEO and PFO. (b) There have been no significant changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the registrant's last fiscal half- year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 10. EXHIBITS (a) A code of ethics, effective May 15, 2003, that applies to the Fund's principal executive officer and principal financial officer are attached hereto. (b) The certifications required by Rule 30a-2 of the Investment Company Act of 1940, as amended, and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Ellsworth Convertible Growth and Income Fund, Inc. By: /s/Thomas H. Dinsmore Thomas H. Dinsmore Chairman of the Board (Principal Executive Officer) Date: November 26, 2003 Pursuant to the requirements of the Securities and Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/Thomas H. Dinsmore Thomas H. Dinsmore Chairman of the Board (Principal Executive Officer) Date: November 26, 2003 By: /s/Gary I. Levine Gary I. Levine Vice President and Treasurer (Principal Financial Officer) Date: November 26, 2003 EX-99.CODE ETH 3 e0903ex-99_code.txt CODE OF ETHICS OF PRINCIPAL OFFICERS EX-99.CODE ETH Bancroft Convertible Fund, Inc. Ellsworth Convertible Growth and Income Fund, Inc. Code of Ethics for Principal Officers Adopted Effective May 15, 2003 I. Preamble This Code of Ethics ("Code") is adopted by the Board of Directors of Bancroft Convertible Fund, Inc. and Ellsworth Convertible Growth and Income Fund, Inc. (the "Funds") in accordance with Section 406 of the Sarbanes-Oxley Act of 2002 and the code of ethics standards established in applicable rules and regulations under the Investment Company Act of 1940, as amended. The Funds are adopting this Code to establish as a policy of the Funds written standards that are reasonably designed to deter wrongdoing and to promote: 1. Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; 2. Full, fair, accurate, timely, and understandable disclosure in reports and documents that the Funds file with, or submit to, the Securities and Exchange Commission (the "Commission" or "SEC") and in other public communications made by the Funds; 3. Compliance with applicable governmental laws, rules, and regulations; 4. The prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and 5. Accountability for adherence to the Code. II. Applicability The provisions of this Code shall apply to all Principal Officers of the Funds. III. Definitions Principal Officer means the principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions on behalf of the Funds regardless of whether these individuals are employed by the Funds or by a third party, including Davis- Dinsmore Management Company ("Davis-Dinsmore"). Compliance Officer means the Chief Compliance Officer of the Funds or his/her designee. Independent Directors means the directors of the Funds who are not "interested persons" of the Funds, as defined in the Investment Company Act. Investment Company Act means the Investment Company Act of 1940, as amended. IV. Principal Officers Should Act Honestly and Candidly Each Principal Officer owes a duty to the Funds to act with integrity. Integrity requires, among other things, being honest and candid. Deceit and subordination of principle are inconsistent with integrity. Each Principal Officer must: 1. Act with integrity, including being honest and candid while still maintaining the confidentiality of information where required by law or the Funds' policies; 2. Observe both the form and spirit of laws and governmental rules and regulations, accounting standards and Fund policies; 3. Adhere to a high standard of business ethics; and 4. Place the interests of the Funds before the Principal Officer's own personal interests. All activities of Principal Officers should be guided by and adhere to these fiduciary standards. V. Principal Officers Should Handle Actual and Apparent Conflicts of Interest Ethically A "conflict of interest" occurs when a Principal Officer's private interest interferes with the interests of, or his service to, the Funds. For example, a conflict of interest would arise if a Principal Officer, or a member of his family, receives improper personal benefits as a result of his position in the Funds. Certain conflicts of interest covered by this Code arise out of the relationships between Principal Officers and the Funds that already are subject to conflict of interest provisions in the Investment Company Act and the Investment Advisers Act of 1940. The Funds' and Davis-Dinsmore's compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures. Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Funds and Davis-Dinsmore of which the Principal Officers are also officers or employees. As a result, this Code recognizes that the Principal Officers will, in the normal course of their duties (whether formally for the Funds or for Davis-Dinsmore, or for both), be involved in establishing policies and implementing decisions which will have different effects on Davis-Dinsmore and the Funds. The participation of the Principal Officers in such activities is inherent in the contractual relationship between the Funds and Davis-Dinsmore and is consistent with the performance by the Principal Officers of their duties as officers of the Funds and, if addressed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, will be deemed to have been handled ethically. In addition, it is recognized by the Board of Directors that the Principal Officers may also be officers or employees of one or more other investment companies covered by this or other Codes. Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. In reading the following examples of conflicts of interest under the Code, Principal Officers should keep in mind that such a list cannot ever be exhaustive by covering every possible scenario. It follows that the overarching principle - that the personal interest of a Principal Officer should not be placed improperly before the interest of the Funds - should be the guiding principle in all circumstances. Each Principal Officer must: 1. Avoid conflicts of interest wherever possible; 2. Handle any actual or apparent conflict of interest ethically; 3. Not use his or her personal influence or personal relationships to influence investment decisions or financial reporting by an investment company whereby the Principal Officer would benefit personally to the detriment of the Funds; 4. Not cause the Funds to take action, or fail to take action, for the personal benefit of the Principal Officer rather than to benefit such Funds; 5. Not use material non-public knowledge of portfolio transactions made or contemplated for the Funds to profit personally, or cause others to profit, from the market effect of such transactions; 6. Discuss any material transaction or relationship that could reasonably be expected to give rise to a conflict of interest with the Compliance Officer; and 7. Complete annually all sections of the Funds' Directors and Officers Questionnaire pertaining to affiliations or other relationships related to conflicts of interest. Types of conflict of interest situations that should be discussed with the Compliance Officer, if material, are: * any outside business activity that detracts from an individual's ability to devote appropriate time and attention to his responsibilities with the Funds; * service as a director on the board of any public or private company; * the receipt of any non-nominal gifts; * the receipt of any entertainment from any company with which the Funds have current or prospective business dealings unless such entertainment is business- related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety; * any ownership interest in, or any consulting or employment relationship with, any of the Funds' service providers, other than Davis-Dinsmore or any affiliated person thereof; * a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Funds for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Principal Officer's employment, such as compensation or equity ownership. VI. Disclosure Each Principal Officer must: 1. Familiarize himself with the disclosure requirements applicable to the Funds as well as the business and financial operations of the Funds; and 2. Not knowingly misrepresent, or cause others to misrepresent, facts about the Funds to others, whether within or outside the Funds, including to the Funds' directors and auditors, and to governmental regulators and self-regulatory organizations. 3. To the extent appropriate within his area of responsibility, consult with other officers and employees of the Funds and Davis- Dinsmore and take other appropriate steps with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Funds file with, or submit to, the SEC and in other public communications made by the Funds. VII. Compliance It is the Funds' policy to comply with all applicable laws and governmental rules and regulations. It is the personal responsibility of each Principal Officer to adhere to the standards and restrictions imposed by those laws, rules and regulations. VIII. Reporting and Accountability Each Principal Officer must: 1. Upon receipt of the Code, sign and submit to the Compliance Officer an Acknowledgement stating that he or she has received, read, and understands the Code. 2. By April 30 of each year submit an Acknowledgement Form to the Compliance Officer confirming that he or she has received, read and understands the Code and has complied with the requirements of the Code as of the date of signing. 3. Not retaliate against any employee or Principal Officer for reports of potential violations that are made in good faith; and 4. Notify the Compliance Officer promptly if he becomes aware of any existing or potential violation of this Code. Failure to do so is itself a violation of this Code. IX. Review and Enforcement Procedures Except as described otherwise below, the Compliance Officer is responsible for applying this Code to specific situations in which questions are presented to it and has the authority to interpret this Code in any particular situation. The following procedures apply in investigating and enforcing this Code, and in reporting on the Code: 1. The Compliance Officer will take all appropriate action to investigate any violations reported to it; 2. Violations and potential violations will be reported to the Audit Committee (the "Committee"), counsel to the Funds and counsel to the Independent Directors after such investigation; 3. If the Committee determines that a violation has occurred, it will inform the Independent Directors who will take all appropriate disciplinary or preventive action; 4. Appropriate disciplinary or preventive action may include a review of and appropriate modifications to applicable policies and procedures, notification of appropriate personnel at Davis- Dinsmore, a letter of censure, or recommendation of suspension or dismissal; 5. The Independent Directors will be responsible for granting waivers, as appropriate; and 6. Any changes to or waivers of this Code will, to the extent required, be disclosed on Form N-CSR as provided by SEC rules. X. Periodic Review At least annually, the Principal Officers and the Compliance Officer will prepare a written report to the Boards of Directors of the Funds describing any issues arising under this Code or procedures, including but not limited to, information about material violations of this Code or procedures and any sanctions imposed in response to those material violations. The Boards of Directors of the Funds will review this Code on an annual basis. XI. Other Policies and Procedures The Funds' and Davis-Dinsmore's codes of ethics under Rule 17j-1 under the Investment Company Act are separate documents applying to Principal Officers and others, and are not part of this Code. XII. Amendments This Code may not be amended except in written form, which is specifically approved by a majority vote of the Funds' Boards of Directors, including a majority of independent directors. XIII. Confidentiality All reports and records prepared or maintained pursuant to this Code shall be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Funds, Davis-Dinsmore, the Board of Directors, and counsel to the foregoing. XIV. Internal Use The Code is intended solely for the internal use by the Funds and does not constitute an admission, by or on behalf of the Funds, as to any fact, circumstance, or legal conclusion. Bancroft Convertible Fund, Inc. Ellsworth Convertible Growth and Income Fund, Inc. CODE OF ETHICS--ACKNOWLEDGEMENT The undersigned hereby acknowledges that (i) he or she is a Principal Officer of the Funds, (ii) that he or she has read and will abide by the Code of Ethics effective as of May 15, 2003, and (iii) that he or she has complied with the requirements of this Code as of the date set forth below. The undersigned recognizes his or her obligation to promote: 1. Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; 2. Full, fair, accurate, timely, and understandable disclosure in reports and documents that the Funds file with, or submit to, the Commission and in other public communications made by the Funds; and 3. Compliance with applicable governmental laws, rules, and regulations. /s/Thomas H. Dinsmore Name Title: Chairman of the Board (principal executive officer) September 30, 2003 Date Bancroft Convertible Fund, Inc. Ellsworth Convertible Growth and Income Fund, Inc. CODE OF ETHICS--ACKNOWLEDGEMENT The undersigned hereby acknowledges that (i) he or she is a Principal Officer of the Funds, (ii) that he or she has read and will abide by the Code of Ethics effective as of May 15, 2003, and (iii) that he or she has complied with the requirements of this Code as of the date set forth below. The undersigned recognizes his or her obligation to promote: 1. Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; 2. Full, fair, accurate, timely, and understandable disclosure in reports and documents that the Funds file with, or submit to, the Commission and in other public communications made by the Funds; and 3. Compliance with applicable governmental laws, rules, and regulations. /s/Gary I. Levine Name Title: Vice President and Treasurer (principal financial officer) September 30, 2003 Date EX-99.906 CERT 4 e0903ex-99_906cert.txt 906 CERTIFICATION EX-99.906CERT Certification of Principal Executive Officer In connection with the Certified Shareholder Report of Ellsworth Convertible Growth and Income Fund, Inc. (the "Company") on Form N-CSR for the period ended September 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Thomas H. Dinsmore, Chairman of the Board of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: November 26,2003 /s/Thomas H. Dinsmore Thomas H. Dinsmore Chairman of the Board A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. Certification of Principal Financial Officer In connection with the Certified Shareholder Report of Ellsworth Convertible Growth and Income Fund, Inc. (the "Company") on Form N-CSR for the period ended September 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Gary I. Levine, Vice President and Treasurer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: November 26, 2003 /s/Gary I. Levine Gary I. Levine Vice President and Treasurer A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. EX-99.CERT 5 e0903ex-99_cert.txt CERTIFICATION OF DISCLOSURE CONTROLS AND PROCEDURES EX-99.CERT Certifications I, Thomas H. Dinsmore certify that: 1. I have reviewed this report on Form N-CSR of Ellsworth Convertible Growth and Income Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have; a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls. Date: November 26, 2003 By: /s/Thomas H. Dinsmore Thomas H. Dinsmore Chairman of the Board (Principal Executive Officer) I, Gary I. Levine certify that: 1. I have reviewed this report on Form N-CSR of Ellsworth Convertible Growth and Income Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have; a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls. Date: November 26, 2003 By: /s/Gary I. Levine Gary I. Levine Vice President, Treasurer (Principal Financial Officer) -----END PRIVACY-ENHANCED MESSAGE-----