SCHEDULE 14A

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Brantley Capital Corporation

Payment of Filing Fee (Check the appropriate box):

      x No fee required.

      o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

      (1) Title of each class of securities to which transaction applies:

      (2) Aggregate number of securities to which transaction applies:

      (4) Proposed maximum aggregate value of transaction:

      (5) Total fee paid:

      (1) Amount previously paid:

      (2) Form, schedule or registration statement no.:

      (3) Filing party:

      (4) Date filed:

20600 Chagrin Boulevard, Suite 1150

January 17, 2002

      You are cordially invited to attend the Special Meeting of the Stockholders of Brantley Capital Corporation, a Maryland corporation, to be held on February 28, 2002 at 1:30 p.m. Eastern Time, at the Residence Inn, Beachwood, Ohio, for the purposes set forth on the enclosed Notice of Special Meeting of Stockholders.

      At the meeting, you will be asked to consider and vote upon a proposal to authorize us to sell up to 6,000,000 shares of common stock at prices per share below the then-current net asset value per share, though not less than (i) $9.00 per share and (ii) the market price at the time of the offering. If the proposal is approved, we would be authorized to sell common stock at such prices for a period of one year.

      We previously scheduled a special meeting of stockholders for November 26, 2001, but postponed that meeting so that stockholders could have a full opportunity to consider the details of a revised proposal developed by the Board of Directors as set forth in the enclosed Proxy Statement. The revised proposal:

      While we recognize that an offering of our common stock may be dilutive to net asset value, it is not our intention for any offering to be dilutive to the current market price of our stock. As a business development company, we are prohibited from offering shares of our common stock at prices less than the market price per share.

      The purpose of this proposal is to strategically complement our existing private equity and long term debt portfolio with interest paying mezzanine securities that will create current income. Shares of business development companies that invest primarily in mezzanine investments tend to trade at a premium to net asset value per share due to the expectation of current income produced by such investments. Current market conditions, influenced by more stringent credit standards of commercial banks and more conservative capital structures sought by entrepreneurs and equity sponsors, have created an opportunity for us to expand our mezzanine investment portfolio at this time. In addition, a public offering of our common stock may provide greater liquidity of our stock.

      In connection with this strategic plan, our investment adviser has notified the Board that the investment adviser will defer the portion of its investment advisory fee attributable to any increase in net assets resulting from a public offering of our common stock. The deferred portion of the fee would become payable when the closing price per share of our common stock reaches $12.00 on any three consecutive trading days after a public offering.

      Consistent with our commitment to reduce the discount at which our common stock trades relative to net asset value, the Board of Directors believes that the revised proposal is advisable and in the best interests of the Company and its stockholders and strongly urges you to vote FOR the proposal.

      Stockholders who submitted proxies for the previously scheduled November 26, 2001 meeting must submit a new proxy, vote over the telephone or via the internet or vote in person at the special meeting in order for their vote to be counted.

      More detailed information concerning the proposal is set forth in the accompanying Proxy Statement, which you should read carefully before completing and returning the enclosed proxy.

BRANTLEY CAPITAL CORPORATION

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

      Notice is hereby given that a Special Meeting of the Stockholders of Brantley Capital Corporation, a Maryland corporation (the “Company”), will be held on February 28, 2002 at 1:30 p.m. Eastern Time, at the Residence Inn, Beachwood, Ohio, for the following purposes:

      The holders of record of shares of Common Stock of the Company at the close of business on January 11, 2002 will be entitled to receive notice of and vote at the Special Meeting.

      It is important to your interests that all stockholders participate in the affairs of the Company, regardless of the number of shares you own. Accordingly, we urge you promptly to fill out, sign and return the enclosed proxy or vote over the telephone or via the internet even if you plan to attend the meeting. You have the option to revoke the proxy at any time prior to the meeting, or to vote your shares personally on request if you attend the meeting.

January 17, 2002

BRANTLEY CAPITAL CORPORATION

PROXY STATEMENT FOR SPECIAL MEETING OF STOCKHOLDERS

To Be Held on February 28, 2002

       The proxy that accompanies this statement is being solicited by the Board of Directors (the “Board”) of Brantley Capital Corporation, a Maryland corporation (the “Company”), for use at the Special Meeting of the Stockholders (the “Special Meeting”) to be held on February 28, 2002, or at any adjournment thereof. This proxy statement was first mailed on or about January 17, 2002 to stockholders of record on January 11, 2002.

      On October 26, 2001, the Company mailed a proxy statement to stockholders soliciting votes on a proposal to authorize the Company for a period of one year to sell up to 12,500,000 shares of common stock, par value $.01 per share (the “Common Stock”) at prices per share below the then-current net asset value per share. After considering stockholder concerns about the proposal, the Board met on November 20, 2001 to discuss postponing the special meeting of stockholders and revising the proposal in order to better clarify the Company’s intentions. The Board unanimously approved revising the proposal to reduce the number of shares being authorized to 6,000,000 and to provide that such shares may only be sold at prices equal to or greater than (i) $9.00 per share and (ii) the market price at the time of the offering.

      Stockholders who submitted proxies for the previously scheduled November 26, 2001 meeting must submit a new proxy, vote over the telephone or via the internet or vote in person at the Special Meeting in order for their vote to be counted.

      Any stockholder giving a proxy for the meeting may revoke it before it is exercised by giving a later dated proxy, submitting a new vote over the telephone or via the internet or by giving notice of revocation to the Company in writing or in the open meeting. However, the mere presence at the meeting of the stockholder granting a proxy does not revoke the proxy. Unless revoked as stated above, the shares of Common Stock represented by valid proxies will be voted on all matters to be acted upon at the meeting. On any matter or matters with respect to which the proxy contains instructions for voting, such shares will be voted in accordance with such instructions. Abstentions and broker non-votes will be deemed to be present for the purpose of determining a quorum for the meeting, but shares that are voted as abstentions and broker non-votes, together with any other shares not voted at the Special Meeting, will have the effect of a vote against the proposal. A broker non-vote exists where a broker proxy indicates that the broker is not authorized to vote on a particular proposal.

      The cost of solicitation of proxies in the form accompanying this statement will be borne by the Company. Proxies will be solicited by mail or by telephone or personal interview with an officer or regular employee of the Company, or by requesting brokers and other custodians, nominees and fiduciaries to forward proxy soliciting material to the beneficial owners of shares of Common Stock held of record by such brokers, custodians, nominees or fiduciaries, each of whom will be reimbursed by the Company for its expenses in so doing. In addition, the Company has retained Georgeson Shareholder Communications, Inc., a professional proxy soliciting firm, to assist in the solicitation of proxies and will pay such firm a fee estimated to be $15,000, plus reimbursement of out-of-pocket expenses.

      The record date for determination of stockholders entitled to vote at the Special Meeting is January 11, 2002. As of January 11, 2002, the outstanding voting securities of the Company consisted of 3,810,535 shares of Common Stock. Each share of Common Stock has one vote. The presence, in person or by proxy, of the holders of a majority of the Common Stock of the Company outstanding and entitled to be cast shall constitute a quorum for the purposes of the Special Meeting.

      The Company’s investment adviser, Brantley Capital Management, L.L.C. (the “Investment Adviser”), is located at 20600 Chagrin Boulevard, Suite 1150, Cleveland, Ohio, 44122. The Company’s administrator is State Street Bank and Trust Company, located at 225 Franklin Street, Boston, Massachusetts, 02110.

1

      The Company’s audited financial statements are contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2000 (the “Annual Report”), which previously has been provided to stockholders. Such report, and the financial statements contained therein, are not to be considered as part of this soliciting material. A copy of the Annual Report is available without charge upon request. Please direct your request to Brantley Capital Corporation, Attention: Tab A. Keplinger, 20600 Chagrin Boulevard, Suite 1150, Cleveland, Ohio 44122, phone number: (216) 283-4800. A self-addressed postage paid card for requesting a copy of the Annual Report is provided with this proxy statement for your convenience.

AUTHORIZATION OF THE SALE OF COMMON STOCK

Description Of Proposal And Required Vote

      The Company is asking the stockholders to authorize the Company for a period of one year, to sell up to 6,000,000 shares of its Common Stock at prices per share below the then-current net asset value per share; provided, that any shares sold will be sold at prices per share equal to or greater than (i) $9.00 per share and (ii) the market price at the time of the offering.

      The Company is a closed-end, non-diversified investment company that is regulated as a business development company (a “BDC”) under the Investment Company Act of 1940 (the “1940 Act”). Since the Company’s Common Stock began trading in December 1996, it has consistently traded at a discount from net asset value per share. In general, shares of BDCs that invest primarily in mezzanine securities that generate ordinary income tend to trade at a premium to net asset value per share while shares of BDCs that invest primarily in private equity securities tend to trade at a discount from net asset value per share.

      Thus, if the Company proceeds with its plans to raise capital through sales of shares of its Common Stock in either a public offering or a private financing, the price per share for its stock in such offering or financing is likely to be below the then-current net asset value per share. The 1940 Act generally provides that the Company may sell its Common Stock at prices per share below the then-current net asset value per share, provided that:

With respect to this proposal, the 1940 Act defines “a majority of the outstanding voting securities” of a company as (1) 67% or more of the voting securities present at such meeting if the holders of more than 50% of the outstanding voting securities are present or represented by proxy, or (2) 50% of the outstanding voting securities, whichever of the two is the lesser. In addition, the 1940 Act defines “required majority” as both (1) a majority of the BDC’s directors who have no financial interest in the proposed transaction, plan or arrangement, and (2) a majority of such directors who are not interested persons of the BDC.

Background Of The Company

      The Company provides equity and long-term debt financing to small and medium-sized private companies in a variety of industries throughout the United States. In addition, the Company invests a portion of its assets in small-capitalization public companies. The investment objective of the Company is to achieve

2

      Historically, the Company has focused its investing activities on private equity securities intended to provide long-term capital appreciation. The Company typically does not receive a cash return on its private equity investments until a liquidity event occurs, but instead seeks to achieve long-term capital appreciation in net asset value through such investments. The Company generally structures its private equity investments as participating preferred stock with an 8% to 10% dividend yield that accumulates and is paid upon a liquidity event. The Company’s private equity investments typically range from $1 to $5 million, and the Company generally expects these investments to achieve liquidity within three to five years. The Company has also invested a portion of its assets in equity-linked securities, primarily in the form of mezzanine debt with warrants. Mezzanine financing is subordinated debt financing often accompanied by “equity kickers,” such as warrants. It is generally a second or later round of financing for a portfolio company prior to an initial public offering.

      The Company’s management believes that its portfolio companies have significant potential for long-term growth in sales and earnings. Since the completion of the Company’s initial public offering, management has focused its investment activities on securing new investments for the Company’s portfolio. However, given the nature of the Company’s current portfolio and the fact that this portfolio as a whole is maturing, management is now seeking to position the more mature portfolio companies for appropriate liquidity events. The Company is continuously monitoring portfolio company results and evaluating opportunities to maximize the value of its investments. In that regard, the Company periodically evaluates potential acquisitions, financing transactions, initial public offerings, strategic alliances, and sale opportunities involving portfolio companies. These transactions and activities are generally not disclosed to stockholders and the investing public until such time as the transactions are publicly announced or completed, as the case may be. Any such transaction could have an impact on the valuation of the Company’s investments. However, these revised valuations would generally not be adjusted until the transaction is publicly announced or completed.

      From the Company’s inception in 1996 to date, the Company has invested a total of $25.8 million in 12 private companies. At September 30, 2001, these investments had a stated fair value of $43.0 million, a 67% increase over the original cost, with equity securities representing $39.4 million of the Company’s private portfolio and mezzanine securities making up the other $3.6 million. The Company’s investing activity has increased its net asset value per share to $14.09 as of September 30, 2001, representing a 41% appreciation since the Company began operations. See “Recent Portfolio Transactions.”

      The Company anticipates that its current assets will be fully invested within the next twelve months. In addition, the Company believes that current market conditions, influenced by more stringent credit standards of commercial banks and more conservative capital structures sought by entrepreneurs and equity sponsors, have created an increased demand for mezzanine investments. Therefore, the Company believes it is appropriate to seek additional capital through one or more public or private offerings of its Common Stock.

      The Company has filed a registration statement with the Securities and Exchange Commission (the “Commission”) for an offering of up to 5,750,000 shares of its Common Stock. It is anticipated that those shares will be sold in an underwritten offering after the registration statement becomes effective. Accompanying this proxy statement is a copy of the Company’s preliminary prospectus dated January 10, 2002 (the “Preliminary Prospectus”) that has been filed with the Commission as part of the registration statement. The Preliminary Prospectus is subject to amendment prior to effectiveness of the registration statement. The proposed lead underwriter for this offering is Friedman, Billings, Ramsey & Co., Inc. (“Friedman, Billings, Ramsey”), located at 1001 Nineteenth Street North, Arlington, Virginia, 22209. On January 9, 2002, the last reported sales price of the Company’s Common Stock was $10.75 per share. The net asset value per share of the Company’s Common Stock at September 30, 2001 was $14.09.

      The Company intends to use a substantial portion of the net proceeds from this proposed offering to significantly expand its origination of mezzanine investments. In connection with the Company’s intended expansion of its origination of mezzanine investments, the Board added the provision of current income to the Company’s investment objective. Under the 1940 Act, the Company is not required to obtain stockholder approval to amend its investment objective. Currently, mezzanine investments represent approximately 8.0%

3

      The Company’s future mezzanine investments are expected to range in size from $2 to $7 million. The Company expects to structure these investments, similar to its existing mezzanine investments, as subordinated notes with a fixed interest rate ranging from 12% to 18%, an equity feature such as warrants to buy equity in the portfolio company at a nominal price, and maturities of five to seven years. Upon the closing of new mezzanine investments, the Company expects to receive an origination fee from the portfolio company, typically 2% of its investment. The Company’s mezzanine investment activities target companies that have demonstrated predictable and sustainable cash flows from operations, strong tangible assets, reasonable financial leverage relative to cash flows from operations, and reasonable prospects to retire at least 50% of their senior indebtedness within three years of the Company’s investment.

Considerations of the Board of Directors Regarding the Proposal

      In determining whether or not to sell shares at prices per share below the then-current net asset value per share, the Board has fiduciary obligations to act in the best interests of the Company and its stockholders and must comply with the other requirements of the 1940 Act described above. In this regard, the Board will consider, among other factors, the extent of the discount of the market price from net asset value, the prospects for further growth in the Company’s net asset value and the prospects for an equity or other financing at another time.

      During late 2000, the Board began to explore various strategic alternatives to enhance the Company’s growth and stockholder value. Many potential options were evaluated, including:

      The Board ultimately determined that continuing to operate the Company at its current size or attempting to realize premature liquidity events within the portfolio would not enhance the market value of the Company’s stock and would limit its ability to generate recurring dividend income sought by the investment community and stockholders. Therefore, since shares of BDCs that invest primarily in mezzanine investments tend to trade at a premium to net asset value per share, the Board decided that the Company should raise additional equity capital specifically to develop that portion of the Company’s portfolio that is designed to produce a regular stream of dividend income.

      In February of 2001, the Board began discussing the method by which it would add a significant current income component to the portfolio. Shortly thereafter, the Company attempted to purchase an existing portfolio of mezzanine loans, which would have been financed by seller paper and Company Common Stock. However, that transaction was not consummated.

      On August 31 and September 21, 2001, the Board met to consider the possibility of adopting a proposal to offer shares of Common Stock of the Company at prices below net asset value for a period of one year. At this meeting, presentations were made by legal counsel regarding regulatory and legal issues and by Friedman, Billings, Ramsey addressing the historical performance of yield-focused and equity-focused BDCs. Eventually, the Board determined that it would be in the best interests of the Company and its stockholders to adopt a policy or procedure to raise additional equity capital at prices that might be below net asset value, and invest

4

      In reaching this determination, the Board considered the following factors and information:

      In addition, the Board considered the following risks associated with expanding its mezzanine investments:

5

      See the section entitled “Risk Factors” on page 8 of the Preliminary Prospectus for a listing of additional risks and other factors relating to the Company’s structure and investment objective.

      On October 26, 2001, the Company mailed a proxy statement to Stockholders soliciting votes on a proposal to authorize the Company for a period of one year to sell up to 12,500,000 shares of Common Stock at prices per share below the then-current net asset value per share. After considering stockholder concerns about the proposal, the Board met on November 20, 2001 to discuss postponing the special meeting of stockholders and revising the proposal in order to better clarify the Company’s intentions. The Board unanimously approved revising the proposal to reduce the number of shares being authorized to 6,000,000 and to provide that such shares may only be sold at prices equal to or greater than (i) $9.00 per share and (ii) the market price at the time of the offering.

      In addition to all of the factors discussed above, the Board considered that the Company’s Investment Adviser has notified the Board that it will defer the portion of their investment advisory fee attributable to any increase in net assets resulting from a public offering of Common Stock of the Company. The deferred portion of the fee would become payable when the closing price per share of the Company’s Common Stock reaches $12.00 on any three consecutive trading days after a public offering.

      The Board believes that approval of the revised proposal is important because of the flexibility it would provide to the Company to raise additional equity capital at prices per share below net asset value so that the Company can expand its mezzanine investments. The Company believes that the benefits from expanding its mezzanine investments will provide the Company with an opportunity to grow and expand its business and also provide the potential to receive recurring income that can be paid to stockholders in the form of dividends.

      The Board recommends that you vote FOR the authorization of the Company, for a period of one year, to sell up to 6,000,000 shares of its Common Stock at prices per share below the then-current net asset value per share, provided that any shares sold will be sold at prices per share equal to or greater than (i) $9.00 and (ii) the market price at the time of the offering.

Effects Of Issuance Of Shares At A Price Per Share Below Current Net Asset Value Per Share

      If the stockholders approve this proposal, the Company will be permitted, but not required or otherwise obligated, for a period of one year, to sell up to 6,000,000 shares of its Common Stock, at prices per share below the then-current net asset value per share provided that any shares sold will be sold at prices per share equal to or greater than (i) $9.00 per share and (ii) the market price at the time of the offering. The sale of a substantial number of shares of Common Stock at prices per share below the net asset value per share would dilute the net asset value per share of the Company’s Common Stock. Before voting on this proposal or giving proxies with regard to this matter, stockholders should consider the potential dilutive effect of such sales.

      Dilution in net asset value per share represents the difference between the net asset value per share of Common Stock prior to an offering and the net asset value per share of Common Stock immediately after the completion of an offering.

      The Company’s net asset value as of September 30, 2001 was $53.7 million, or $14.09 per share based on the outstanding shares of Common Stock at September 30, 2001. See “Recent Portfolio Transactions.” The Company’s net asset value reflects the aggregate valuation of the Company’s total assets, less the Company’s total liabilities. Since the assets of the Company include shares of publicly-traded securities, any change in the aggregate market value of such securities could cause a corresponding change in the net asset value of the Company’s Common Stock. For those portfolio securities that are privately held, the fair value of those securities is determined in good faith by the Board. Thus, any change in the aggregate fair value of privately-held securities as determined by the Board would also cause a corresponding change in the net asset value of the Company’s Common Stock. The Company’s net asset value has fluctuated in the past due to these factors, and is likely to continue to do so in the future.

      The Company’s Common Stock is traded on the Nasdaq National Market under the symbol “BBDC” and historically has traded at prices below net asset value per share. The following table sets forth, for the periods indicated, the net asset value per share of Common Stock, the high and low sales prices per share of the Common Stock and the percentage of the discount from the high and low sales price per share of the

6

     The price at which shares of the Common Stock will be issued in any future offering pursuant to the authorization sought by this proxy statement would be at approximately the market value, rather than the net asset value, of such Common Stock at the time of the offering or financing. The Company cannot predict the future market value or net asset value of the Common Stock, and thus, the Company cannot predict the prevailing discount between market value and net asset value, if any, at the time of any future offering. However, based on the historical market prices of shares of the Company’s Common Stock and the Company’s net asset value, it is likely that the shares of Common Stock issued by the Company in an offering pursuant to the authorization sought by this proxy statement will be issued at a price per share below the net asset value per share of the Common Stock.

      Based on an offering of 5,750,000 shares of Common Stock of the Company, and a net asset value per share of $14.09 at September 30, 2001, the following table presents information with respect to potential dilution to the Company’s existing investors resulting from an offering or financing on a per share basis:

      The issuance of additional shares of Common Stock will also have an effect on the gross amount of management fees paid by the Company to the Investment Adviser. The Investment Advisory Agreement with the Investment Adviser provides for a management fee payable to the Investment Adviser as compensation for managing the Company’s investment portfolio. The management fee is computed as a percentage of the Company’s average net assets. The increase in the Company’s net assets resulting from any such issuance would cause a corresponding increase in the gross amount of management fees payable to the Investment Adviser, but would not increase or decrease the management fee as a percentage of net assets. Certain officers

7

      The Board believes that the dilution in net asset value per share resulting from offerings of shares of the Company’s Common Stock may be significantly outweighed by the benefits of such offerings to the Company and its stockholders.

Recent Portfolio Transactions

      On December 21, 2001, Flight Options, Inc, one of the Company’s original portfolio companies, and Raytheon Travel Air, a Wichita, Kansas-based unit of Raytheon Company (NYSE:RTN), a Lexington, Mass. based defense contractor, agreed to combine operations into one fractional aircraft ownership program to be known as Flight Options. Under the terms of the transaction, Flight Options, Inc. will hold 50.1% ownership of the new business with Raytheon holding 49.9%.

      As a result of the transaction described above, the Board met to review the terms of the transaction including, among other things, a valuation review prepared by an investment banking firm working on the transaction. Pursuant to the Company’s written policy that governs the valuation of its assets, the Board values privately held investments, like Flight Options Inc. In adjusting the value of any given portfolio company, the Board applies various methods under the valuation guidelines to determine value. They may use, when available, third-party transactions in a portfolio company’s securities as the basis of valuation. This basis of valuation is referred to as the “private market method” and is used only with respect to completed transactions or firm offers made by sophisticated, independent investors. See “Determination of Net Asset Value” in the Preliminary Prospectus.

      Consistent with the Company’s valuation guidelines, the Board used the private market method to value the Company’s investment in Flight Options, Inc. and approved an increase in the value of the Company’s investment in Flight Options, Inc. to $32,500,000 from its September 30, 2001 valuation of $17,779,379, resulting in a $14,720,621 or $3.86 per share unrealized gain to be reported in the fourth quarter of 2001. The Company’s investment in Flight Options has an original cost basis of $5,562,500. At September 30, 2001, the Company’s last reported net asset value per share was $14.09.

      Historically, the Company has focused its investing activities on private equity securities. The Company began making such investments in 1997 and is now entering into a phase of the business plan which emphasizes positioning the more mature portfolio companies for appropriate liquidity events. As a result, the Company is continuously monitoring portfolio company results and evaluating opportunities to maximize the valuation of its investments. In that regard, the Company periodically evaluates potential acquisitions, financing transactions, initial public offerings, strategic alliances, and sale opportunities involving its portfolio companies. Any such transaction could have an impact on the valuation of the Company’s investments. These transactions and activities are generally not disclosed to the Company’s stockholders and the investing public until such time as the transactions are publicly announced or completed, as the case may be.

8

      Pursuant to the terms of the investment advisory agreement, dated November 26, 1996, the amount of the fee payable to the Company’s investment adviser will increase based on the increase in average net assets as a result of the increase in the valuation of the Company’s investment in Flight Options, Inc. See “The Investment Advisory Agreement” in the Preliminary Prospectus.

Board Recommendation and Vote Required

      The Board believes this proposal is important because of the flexibility it would provide the Company to raise additional equity capital at prices below its net asset value per share so that the Company can continue to grow and expand its portfolio company investments. Consequently, the Board recommends that the stockholders vote “FOR” this proposal.

The Board recommends that you vote FOR the authorization of the Company, for a period of one year, to sell up to 6,000,000 shares of its Common Stock at prices per share below the then-current net asset value per share, provided that any shares sold will be sold at prices per share equal to or greater than (i) $9.00 and (ii) the market price at the time of the offering.

9

STOCK OWNERSHIP OF OFFICERS, DIRECTORS AND BENEFICIAL OWNERS

      The following table sets forth as of January 10, 2002, the number of shares of the Company’s Common Stock beneficially owned by each of its current directors and executive officers and all directors and executive officers as a group, according to information furnished to the Company by such persons, except as noted below. The address for each of the directors and executive officers is 20600 Chagrin Boulevard, Suite 1150, Cleveland, Ohio 44122.

     The following table sets forth information about one person known by the Company to be a beneficial owner of more than 5% of the outstanding shares of its Common Stock:

10

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

      Information contained in this proxy statement may contain “forward-looking statements” which can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate” or “continue” or the negative thereof or other variations or similar words or phrases. The matters described in this proxy statement, as well as those matters described in the section of the Preliminary Prospectus entitled “Risk Factors,” constitute cautionary statements identifying important factors with respect to any such forward-looking statements, including certain risks and uncertainties, that could cause actual results to differ materially from those in such forward-looking statements.

STOCKHOLDER PROPOSALS FOR THE 2002 ANNUAL MEETING

      Any stockholder who is the record or beneficial owner of at least 1% or $2,000 in market value of the Company’s Common Stock entitled to be voted at the Company’s 2002 Annual Meeting (the “Annual Meeting”) and who has held such Common Stock for at least one year may present a proposal at the Annual Meeting.

      A stockholder who intends to present a proposal at the Annual Meeting, and who wishes to have the proposal included in the Company’s proxy statement and form of proxy for that meeting, must deliver the proposal to the Company by February 15, 2002. The Company must receive notice of all other stockholder proposals for the Annual Meeting no later than May 12, 2002 or earlier than April 12, 2002, or the Company will consider them untimely, in which case the Company’s proxy shall confer discretionary voting authority regarding those stockholder proposals.

OTHER MATTERS

      Management does not know of any other matters that will come before the Special Meeting. In case any other matter should properly come before the Special Meeting, it is the intention of the persons named in the enclosed proxy to vote in accordance with their best judgment.

      In the event that sufficient votes in favor of the proposals set forth in the Notice of the Special Meeting of Stockholders and Proxy Statement are not received by the time scheduled for the Special Meeting, the individuals named as proxies may move for one or more adjournments of the Special Meeting to permit further solicitation of proxies with respect to any such proposals. Any such adjournment will require the affirmative vote of a majority of the shares of Common Stock present at the Special Meeting.

***********************

      Please sign, date and return the proxy at your earliest convenience in the enclosed envelope. No postage is required for mailing in the United States. A prompt return of your proxy will save the expense of further mailings.

January 17, 2002

11

BRANTLEY CAPITAL CORPORATION

PROXY

      THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF BRANTLEY CAPITAL CORPORATION

The undersigned hereby appoints Robert P. Pinkas and Michael J. Finn, and each of them, the proxies of the undersigned, with full power of substitution, to vote all Common Stock of Brantley Capital Corporation which the undersigned is entitled to vote at the Special Meeting of Stockholders of Brantley Capital Corporation, on February 28, 2002, and at any adjournments thereof.

IF NO INSTRUCTION IS INDICATED, AUTHORITY IS GRANTED TO CAST THE VOTE OF THE UNDERSIGNED “FOR” THE APPROVAL OF THE PROPOSAL LISTED ON THIS PROXY.

      18

BRANTLEY CAPITAL CORPORATION

RECORD DATE SHARES: