-----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, S3SBQoGTHzkXZtql5gHa7AM1vUiHzkPFItetXKqnM5Z30gdi+URFq5n4QYya5v1Z 95lug5t82H+KVbQKFXMpfw== 0000009521-99-000013.txt : 19991224 0000009521-99-000013.hdr.sgml : 19991224 ACCESSION NUMBER: 0000009521-99-000013 CONFORMED SUBMISSION TYPE: NSAR-B PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19991031 FILED AS OF DATE: 19991223 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANCROFT CONVERTIBLE FUND INC CENTRAL INDEX KEY: 0000009521 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 042476994 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: NSAR-B SEC ACT: SEC FILE NUMBER: 811-02151 FILM NUMBER: 99779618 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 AVENUE STREET 2: SUITE 550 CITY: MORRISTOWN STATE: NJ ZIP: 07960 NSAR-B 1 N-SAR (6.1) PAGE 1 000 B000000 10/31/1999 000 C000000 0000009521 000 D000000 N 000 E000000 NF 000 F000000 Y 000 G000000 N 000 H000000 N 000 I000000 6.1 000 J000000 A 001 A000000 BANCROFT CONVERTIBLE FUND, INC 001 B000000 811-2151 001 C000000 9736311177 002 A000000 65 MADISON AVENUE, SUITE 550 002 B000000 MORRISTOWN 002 C000000 NJ 002 D010000 07960 002 D020000 7308 003 000000 N 004 000000 N 005 000000 N 006 000000 N 007 A000000 N 007 B000000 0 007 C010100 1 007 C010200 2 007 C010300 3 007 C010400 4 007 C010500 5 007 C010600 6 007 C010700 7 007 C010800 8 007 C010900 9 007 C011000 10 008 A000001 DAVIS-DINSMORE MANAGEMENT COMPANY 008 B000001 A 008 C000001 801-08123 008 D010001 MORRISTOWN 008 D020001 NJ 008 D030001 07960 008 D040001 7308 012 A000001 CHASEMELLON SHAREHOLDER SERVICES, L.L.C. 012 B000001 84-5579 012 C010001 NEW YORK 012 C020001 NY 012 C030001 10004 013 A000001 PRICEWATERHOUSECOOPERS LLP 013 B010001 NEW YORK 013 B020001 NY 013 B030001 10019 013 B040001 6013 015 A000001 THE BANK OF NEW YORK PAGE 2 015 B000001 C 015 C010001 NEW YORK 015 C020001 NY 015 C030001 10286 015 C040001 1258 015 E010001 X 018 000000 Y 019 A000000 N 019 B000000 0 020 A000001 SALOMON SMITH BARNEY 020 B000001 13-1912900 020 C000001 7 020 A000002 GOLDMAN, SACHS & CO., INC. 020 B000002 13-5108880 020 C000002 3 020 A000003 BANC OF AMERICA 020 B000003 56-2058405 020 C000003 3 020 A000004 MORGAN STANLEY & CO., INC. 020 B000004 13-2655998 020 C000004 1 020 A000005 BAIRD PATRICK 020 B000005 13-2766571 020 C000005 1 020 A000006 FORUM CAPITAL MARKETS L.P. 020 B000006 06-1351111 020 C000006 1 020 A000007 MERRILL LYNCH, PIERCE, FENNER & SMITH, INC. 020 B000007 13-5674085 020 C000007 1 020 A000008 CREDIT SUISSE FIRST BOSTON CORP. 020 B000008 13-5659485 020 C000008 1 020 A000009 J.P. 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086 C010000 0 086 C020000 0 086 D010000 0 086 D020000 0 086 E010000 0 086 E020000 0 086 F010000 0 086 F020000 0 087 A010000 COMMON STOCK 087 A020000 05-9695106 087 A030000 BCV 088 A000000 N 088 B000000 N 088 C000000 N 088 D000000 N PAGE 10 SIGNATURE GARY LEVINE TITLE TREASURER EX-99.1 2 N-SAR Ques. 77B REPORT OF INDEPENDENT ACCOUNTANTS To the Shareholders and Board of Directors of Bancroft Convertible Fund, Inc. In planning and performing our audit of the financial statements and financial highlights of Bancroft Convertible Fund, Inc.(the "Fund") for the year ended September 30, 1999, we considered its internal control, including control over safeguarding securities, in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and financial highlights and to comply with the requirements of Form N-SAR, not to provide assurance on internal control. The management of the Fund is responsible for establishing and maintaining internal control. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of controls. Generally, controls that are relevant to an audit pertain to the entity's objective of preparing financial statements and financial highlights for external purposes that are fairly presented in conformity with generally accepted accounting principles. Those controls include the safeguarding of assets against unauthorized acquisition, use or disposition. Because of inherent limitations in internal controls, errors or fraud may occur and may not be detected. Also, projection of any evaluation of internal control to future periods is subject to the risk that it may become inadequate because of changes in conditions or that the effectiveness of the design and operation may deteriorate. Our consideration of internal control would not necessarily disclose all matters in internal control that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a condition in which the design or operation of any specific internal control component does not reduce to a relatively low level the risk that errors or fraud in amounts that would be material in relation to the financial statements and financial highlights being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. However, we noted no matters involving internal control, including controls over safeguarding securities, that we consider to be material weaknesses as defined above as of October 31, 1999. This report is intended solely for the information and use of management and the Securities and Exchange Commission. PricewaterhouseCoopers LLP New York, New York November 19, 1999 EX-99.2 3 N-SAR Ques. 77Q1A: Exhibit 2 AMENDED AND RESTATED BY-LAWS OF BANCROFT CONVERTIBLE FUND, INC. (Adopted Effective October 18, 1999) ARTICLE I--OFFICES Section 1. The registered office in the State of Delaware shall be as stated in the Certificate of Incorporation or at such other location in the State of Delaware to which the registered office shall be changed by action of the Board of Directors. Section 2. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require. ARTICLE II--MEETINGS OF STOCKHOLDERS Section 1. All meetings of the stockholders shall be held at such time and place, within or without the State of Delaware, as may be fixed from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 2. Annual meetings of stockholders shall be held on the fourth Wednesday in February, or any other day as may be fixed by the Board of Directors and stated in the notice of the meeting, at which they shall elect, by a plurality vote, Directors and shall transact such other business as may properly be brought before the meeting. Section 3. Written notice of the annual meeting, stating the place, date and hour of the meeting, shall be given to each stockholder entitled to vote thereat not less than ten nor more than sixty days before the date of the meeting. Section 4. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order, showing the address of and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city, town or village where the meeting is to be held and which place shall be specified in the notice of the meeting, or, if not specified, at the place where said meeting is to be held, and the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and subject to the inspection of any stockholder who may be present. Section 5. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation, may be called by the Chairman of the Board of Directors or the President and shall be called by the Chairman of the Board or President at the request in writing of a majority of the Board of Directors, or at the request in writing of the stockholders owning a majority in amount of the entire capital stock of the Corporation issued and outstanding and entitled to vote. Such request shall state the purpose and purposes of the proposed meeting. Section 6. Written notice of a special meeting of stockholders, stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given to each stockholder entitled to vote thereat, not less than ten nor more than sixty days before the date fixed for the meeting, provided, however, that the first meeting of stockholders may be held on two days notice given to each stockholder. Section 7. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. Section 8. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote of the meeting. Section 9. When a quorum is present at any meeting, in all matters other than the election of Directors, the affirmative vote of the majority of shares present in person or represented by proxy at such meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless the question is one upon which, by express provision of the statutes or of the Certificate of Incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question. Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of Directors. Section 10. Each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after one year from its date, unless the proxy provides for a longer period. A proxy may be given to the Corporation by the stockholder or by his or her duly authorized attorney in fact. A proxy may be given to the Corporation through written, electronic, computerized, telegram, cablegram, facsimile, telecommunication or telex communication. A stockholder may duly authorize an attorney in fact through written, electronic, telephonic, computerized, telegram, cablegram, facsimile, telecommunication, telex or oral communication or by any other form of communication. Section 11. Whenever the vote of the stockholders at a meeting thereof is required or permitted to be taken in connection with any corporate action by any provisions of the statutes or of the Certificate of Incorporation, the meeting, notice thereof and vote of stockholders may be dispensed with, if all the stockholders who would have been entitled to vote upon the action if such meeting were held shall consent in writing to such corporate action being taken and the writing is filed with the minutes of the proceedings of such holders. ARTICLE III--DIRECTORS Section 1. The number of Directors which shall constitute the whole Board shall be determined from time to time by the Board of Directors, but shall not be less than five. Beginning in 1972, the Directors shall be elected at the annual meeting of the stockholders. For purposes of this Article III, a potential Director will not be deemed to be qualified to serve as a Director unless, after giving effect to his or her election to the Board of Directors, at least two-thirds of the Board of Directors would be Independent Directors, as defined in Section 3 below. Section 2. Any vacancy in the Board of Directors resulting from death, resignation, increase in the authorized number of Directors or otherwise, may be filled for the unexpired term by a majority vote of the remaining Directors in office, though less than a quorum; provided, that: (i) the Independent Director requirements specified in Section 1 above are satisfied, (ii) after the filling of any such vacancy at least two-thirds of the Board of Directors then holding office shall have been elected by the stockholders, and (iii) if at any time less than a majority of the Directors then holding office were elected by the stockholders, a stockholders' meeting shall forthwith be called, to be held as promptly as possible, and in any event within sixty days, for the purpose of electing an entire new Board of Directors. If, at any time, fewer than two-thirds of the Directors are Independent Directors, the Board of Directors shall, at the next regularly scheduled meeting or at any special meeting, consider appointing additional Independent Directors to the Board. Each Director elected shall hold office until his or her successor is elected and qualified. Unless the Board of Directors adopts a policy that provides otherwise, Directors need not be stockholders. Section 3. For purposes of these By-Laws, a Director shall be deemed to be an "Independent Director" if he or she: (i) is not an "interested person" of the Corporation within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder and (ii) is not a former officer or director of the Corporation's investment adviser or its subsidiary. Section 4. The business of the Corporation shall be managed by its Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws directed or required to be exercised or done by the stockholders. Section 5. The Independent Directors of the Corporation, as defined in Section 3 above, or a committee of Independent Directors, may use the assets of the Corporation to retain experts, including legal counsel other than regular legal counsel to the Corporation and the Independent Directors, when they deem it necessary to further the interests of the Corporation's stockholders. MEETING OF THE BOARD OF DIRECTORS Section 6. The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Delaware. Section 7. The first meeting of each newly elected Board of Directors shall be held as soon as practicable following and at the same place as the Annual Meeting of Stockholders and no notice of such meeting shall be necessary to the newly elected Directors in order legally to constitute the meeting, provided a quorum shall be present. In the event such meeting is not held at the said time and place, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors, or as shall be specified in a written waiver signed by all of the Directors. Section 8. Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board. Section 9. Special meetings of the Board may be called by the Chairman of the Board or the President on one day's notice to each Director, either personally or by mail or by telegram; special meetings shall be called by the Chairman of the Board or the President in like manner and on like notice on the written request of two Directors. Personal notice shall include notice given orally or by telephone. Section 10. At all meetings of the Board, a majority of the total number of Directors shall constitute a quorum for the transaction of business and the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the Certificate of Incorporation. If a quorum shall not be present at any meeting of the Board of Directors, the Directors present thereat may adjourn the meeting from time to time without notice other than announcement at the meeting, until a quorum shall be present. Section 11. Unless otherwise restricted by the Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee. Section 12. Unless otherwise restricted by the Certificate of Incorporation or these By-Laws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting. COMMITTEES OF DIRECTORS Section 13. The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of two or more of the Directors of the Corporation, which, to the extent provided in the resolution, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. In the absence or disqualification of any member of such a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Section 14. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required. COMPENSATION OF DIRECTORS Section 15. The Directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors. A Director may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as Director, or both such fixed sum and stated salary. No such payment shall preclude any Director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings. ARTICLE IV--NOTICES Section 1. Notices to stockholders shall be in writing and delivered personally or mailed to stockholders at their addresses appearing on the books of the Corporation. Notices to Directors shall be oral or by telephone, telegram or facsimile, or in writing delivered personally or mailed to the Directors at their addresses appearing on the books of the Corporation. Notice by mail to stockholders or Directors shall be deemed to be given at the time when the same shall be mailed. Section 2. Whenever any notice is required to be given under the provisions of the statutes or of the Certificate of Incorporation or of these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. ARTICLE V--OFFICERS Section 1. The officers of the Corporation shall include the Chairman of the Board, the President, one or more Vice Presidents (one of whom may be designated an Executive Vice President), the Treasurer and the Secretary. Any two or more offices may be held by the same person. Such officers shall be elected by the Board of Directors each year at the organization meeting held after the annual meeting of stockholders, each to hold office until the meeting of the Board following the next annual meeting of the stockholders and until his or her successor shall have been duly elected and shall have qualified, or until his or her death, or until he or she shall have resigned, or have been removed, as hereinafter provided in these By-Laws. The Board may from time to time elect, or delegate to the Chairman of the Board or the President the power to appoint, such officers (including one or more Assistant Vice Presidents, one or more Assistant Treasurers and one or more Assistant Secretaries) and such agents, as may be necessary or desirable for the business of the Corporation. Section 2. Any officer of the Corporation may resign at any time by giving written notice of his or her resignation to the Board, the Chairman of the Board, the President or the Secretary. Any such resignation shall take effect at the time specified therein, or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 3. Any officer or agent of the Corporation may be removed, either with or without cause, at any time, by the vote of the majority of the entire Board at any meeting of the Board or, except in the case of an officer or agent elected or appointed by the Board, by the Chairman of the Board or by the President. Section 4. A vacancy in any office, whether arising from death, resignation, removal or any other cause, may be filled for the unexpired portion of the term of the office which shall be vacant, in the manner prescribed in these By-Laws for the regular election or appointment to such office. Section 5. The salaries of all officers and agents of the Corporation shall be fixed by the Board of Directors. THE CHAIRMAN Section 6. The Chairman of the Board shall be the chief executive officer of the Corporation and shall have the general and active management of the business of the Corporation and general and active supervision and direction over the other officers, agents and employees and shall see that their duties are properly performed. He or she shall, if present, preside at each meeting of the stockholders and of the Board and shall be an ex officio member of all committees of the Board. He or she shall perform all duties incident to the office of Chairman of the Board and chief executive officer and such other duties as may from time to time be assigned to him or her by the Board. In the case of the absence of the President or his or her inability to act, the Chairman of the Board shall perform the duties of the President and when so acting shall have all the powers of, and be subject to all the restrictions upon, the President. He or she shall perform all the duties incident to the office of president and such other duties as from time to time may be assigned to him or her by the Board or these By- Laws. THE PRESIDENT Section 7. The President shall be the chief administrative officer of the Corporation and shall have general and active supervision and direction over the business and affairs of the Corporation and over its several officers, subject, however, to the direction of the Chairman of the Board and the control of the Board. At the request of the Chairman of the Board, or in the case of his or her absence or inability to act, the President shall perform the duties of the Chairman of the Board and when so acting shall have all the powers of, and be subject to all the restrictions upon, the Chairman of the Board. He or she shall perform all duties incident to the office of Chairman of the Board and when so acting shall have all the powers of, and be subject to all the restrictions upon, the Chairman of the Board. He or she shall perform all duties incident to the office of the Chairman of the Board and such other duties as from time to time may be assigned to him or her by the Board, the Chairman of the Board or these By-Laws. VICE-PRESIDENTS Section 8. In the absence of the President or in the event of his or her refusal to act, and if a Vice President has been appointed by the Board of Directors, the Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order designated by the Directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Each Vice President shall perform such other duties as from time to time may be assigned to him or her by the Board, the Chairman of the Board or the President. THE TREASURER AND ASSISTANT TREASURER Section 9. The Treasurer shall (a) have charge and custody of, and be responsible for, all the funds and securities of the Corporation, except those which the Corporation has placed in the custody of a bank or trust company pursuant to a written agreement designating such bank or trust company as custodian of the property of the Corporation; (b) keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation, except that such functions may be delegated to the Custodian of the property of the Corporation pursuant to a written agreement; (c) cause all moneys and other valuables to be deposited to the credit of the Corporation; (d) receive, and give receipts for, moneys due and payable to the Corporation from any source whatsoever; (e) disburse the funds of the Corporation and supervise the investment of its funds as ordered or authorized by the Board, taking proper vouchers therefor; and (f) in general, perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him or her by the Board, the President, or the Chairman of the Board. Section 10. The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors (or if there be no such determination, then in order of their election) shall, in the absence of the Treasurer or in the event of his or her inability or refusal to act, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. THE SECRETARY AND ASSISTANT SECRETARY Section 11. The Secretary shall (a) keep or cause to be kept in one or more books provided for the purpose, the minutes of all meetings of the Board, the committees of the Board and the stockholders; (b) see that all notices are duly given in accordance with the provisions of these By-Laws and as required by law; (c) be custodian of the records and the seal of the Corporation and affix and attest the seal to all stock certificates of the Corporation (unless the seal of the Corporation on such certificates shall be a facsimile, as hereinafter provided) and affix and attest the seal to all other documents to be executed on behalf of the Corporation under its seal; (d) see that the books, reports, statements, certificates and other documents and records required by law to be kept and filed are properly kept and filed; and (e) in general, perform all the duties incident to the office of Secretary and such other duties as from time to time may be assigned to him or her by the Board, the President, or the Chairman of the Board. Section 12. The Assistant Secretary, or if there shall be more than one, the Assistant Secretaries in the order determined by the Board of Directors (or if there be no such determination, then in order of their election) shall, in the absence of the Secretary or in the event of his or her inability or refusal to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. ARTICLE VI--CERTIFICATES OF STOCK Section 1. Every holder of stock in the Corporation shall be entitled to have a certificate, signed by, or in the name of the Corporation by, the Chairman of the Board, the President or a Vice President and the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, and sealed with the manual or facsimile seal of the Corporation, certifying the number of shares owned by him or her in the Corporation. Section 2. Where a certificate is signed (1) by a transfer agent or an assistant transfer agent or (2) by a transfer clerk acting on behalf of the Corporation and a registrar, the signature of any such President, Vice President, Treasurer, Assistant Treasurer, Secretary or Assistant Secretary may be facsimile. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates, shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates have been delivered by the Corporation, such certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the Corporation. LOST CERTIFICATES Section 3. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed, or upon receipt of other satisfactory evidence of such loss, theft or destruction. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his or her legal representative, to advertise the same in such manner as it shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. TRANSFERS OF STOCK Section 4. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. CLOSING OF TRANSFER BOOKS Section 5. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix in advance a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. Unless a record date is fixed by the Board of Directors for the determination of stockholders entitled to receive notice of, or to vote at, a stockholders' meeting, transferees of shares which are transferred on the books of the Corporation within twenty days next preceding the date of such meeting shall not be entitled to receive notice of, or to vote at, such meeting. REGISTERED STOCKHOLDERS Section 6. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. ARTICLE VII--GENERAL PROVISIONS FISCAL YEAR Section 1. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors. SEAL Section 2. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Corporate Seal, Delaware." The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. REPORTS Section 3. The Corporation shall transmit to its stockholders semi-annual unaudited or audited reports of its financial condition and annual reports audited by independent public accountants. DIVIDENDS Section 4. Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting pursuant to law. Dividends may be paid in cash, in property or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation. Section 5. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation or for such other purpose as the Directors shall think conducive to the interest of the Corporation, and the Directors may modify or abolish any such reserve in the manner in which it was created. ARTICLE VIII--INDEMNIFICATION The Corporation shall indemnify its officers and Directors to the extent permitted by Delaware law as amended from time to time, provided, however, that no officer or Director shall be protected against any liability to the corporation or its stockholders to which he or she would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office. ARTICLE IX--AMENDMENTS These By-Laws may be amended or repealed, or new By-Laws may be adopted by the Board of Directors at any meeting thereof; provided, however, that notice of such meeting shall have been given as provided in these By-Laws, which notice shall mention that amendment or repeal of the By-Laws, or the adoption of new By-Laws, is one of the purposes of such meeting. Any such By- Laws adopted by the Board may be amended or repealed, or new By-Laws may be adopted, by vote of the stockholders of the Corporation, at any annual or special meeting thereof; provided, however, that the notice of such meeting shall have been given as provided in these By-Laws, which notice shall mention that amendment or repeal of these By-Laws, or the adoption of new By-Laws, is one of the purposes of such meeting. 4 PHL_A 1295618 v 3 PHL_A 1295618 v 3 EX-99.3 4 N-SAR Ques. 77Q1B: Exhibit 3 The following are additions to the Charter of Bancroft Convertible Fund, Inc. NOMINATING AND ADMINISTRATION COMMITTEE CHARTER Nominating and Administration Committee Membership The Nominating and Administration Committee shall be composed entirely of independent directors. Board Nominations and Functions 1. The Committee shall make nominations for independent director membership on the Board of Directors. The Committee shall evaluate candidates' qualifications for Board membership and their independence from the Funds' investment adviser and other principal service providers. Persons selected must be independent in terms of both the letter and the spirit of the Investment Company Act of 1940. The Committee shall also consider the effect of any relationships beyond those delineated in the 1940 Act that might impair independence, e.g., business, financial or family relationships with managers or service providers. If members of the Committee do not unanimously agree to nominate an incumbent independent director for re-election to the Board of Directors, the Committee shall submit the issue of nomination of such person for re-election to the independent directors as a group. 2. The Committee shall periodically review Board governance procedures and shall recommend any appropriate changes to the full Board of Directors. 3. The Committee shall periodically review the composition of the Board of Directors to determine whether it may be appropriate to add individuals with different backgrounds or skill sets from those already on the Board. 4. The Committee shall periodically review director compensation and shall recommend any appropriate changes to the independent directors as a group. Committee Nominations and Functions 1. The Committee shall make nominations for membership on all committees and shall review committee assignments at least annually. 2. The Committee shall review as necessary the responsibilities of any committees of the Board, whether there is a continuing need for each committee, whether there is a need for additional committees of the Board, and whether committees should be combined or reorganized. The Committee shall make recommendations for any such action to the full Board. Other Powers and Responsibilities 1. The Committee shall monitor the performance of legal counsel employed by the Funds and the independent directors, and shall be responsible for the supervision of counsel for the independent directors. 2. The Committee shall have the resources and authority appropriate to discharge its responsibilities, including authority to retain special counsel and other experts or consultants at the expense of the appropriate Fund(s). 3. The Committee shall review this Charter at least annually and recommend any changes to the full Board of Directors. AUDIT COMMITTEE CHARTER 1. The Audit Committee shall be composed entirely of independent directors. 2. The purposes of the Audit Committee are: (a) to oversee the Funds' accounting and financial reporting policies and practices, its internal controls and, as appropriate, the internal controls of certain service providers; (b) to oversee the quality and objectivity of the Funds' financial statements and the independent audit thereof; and (c) to act as a liaison between the Funds' independent auditors and the full Board of Directors. The function of the Audit Committee is oversight; it is management's responsibility to maintain appropriate systems for accounting and internal control, and the auditor's responsibility to plan and carry out a proper audit. 3. To carry out its purposes, the Audit Committee shall have the following duties and powers: (a) to recommend the selection, retention or termination of auditors and, in connection therewith, to evaluate the independence of the auditors, including whether the auditors provide any consulting services to the manager, and to receive the auditors' specific representations as to their independence; (b) to meet with the Funds' independent auditors, including private meetings, as necessary (i) to review the arrangements for and scope of the annual audit and any special audits; (ii) to discuss any matters of concern relating to the Funds' financial statements, including any adjustments to such statements recommended by the auditors, or other results of said audit(s); (iii) to consider the auditors' comments with respect to the Funds' financial policies, procedures and internal accounting controls and management's responses thereto; and (iv) to review the form of opinion the auditors propose to render to the Board and shareholders; (c) to consider the effect upon the Funds of any changes in accounting principles or practices proposed by management or the auditors; (d) to review the fees charged by the auditors for audit and non-audit services; (e) to investigate improprieties or suspected improprieties in fund operations; and (f) to report its activities to the full Board on a regular basis and to make such recommendations with respect to the above and other matters as the Committee may deem necessary or appropriate. 4. The Committee shall meet on a regular basis and is empowered to hold special meetings as circumstances require. 5. The Committee shall regularly meet with the Treasurer of the Funds. 6. The Committee shall have the resources and authority appropriate to discharge its responsibilities, including the authority to retain special counsel and other experts or consultants at the expense of the appropriate Fund(s). 7. The Committee shall review this Charter at least annually and recommend any changes to the full Board of Directors. PHL_A 1305330 v 1 4 PHL_A 1305330 v 1 -----END PRIVACY-ENHANCED MESSAGE-----