SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ X ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-12
BOULDER TOTAL RETURN FUND, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] 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 transactions
applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identity the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
[GRAPHIC OMITTED] BOULDER TOTAL RETURN FUND, INC.
1680 38TH STREET, SUITE 800
BOULDER, COLORADO 80301
March ___, 2006
Dear Fellow Stockholder,
You are cordially invited to attend the 2006 Annual Meeting of Stockholders
of Boulder Total Return Fund, Inc., a Maryland corporation (the "Fund"), which
will be held on April 24, 2006 at 9:00 a.m. Mountain Standard Time (local time),
at the Scottsdale Plaza Resort, 7200 North Scottsdale Road, Scottsdale, Arizona.
Details of the business to be presented at the meeting can be found in the
accompanying Notice of Annual Meeting and Proxy Statement.
There are two non-routine proposals contained in this Proxy. The first is a
proposal to amend the charter of the Fund (the "Charter") to facilitate a rating
upgrade of the Fund's taxable auction market preferred stock (the "AMPS").
Presently, the Fund is leveraged with $77.5 million in AMPS. The AMPS are
auctioned every 28 days, at which time a new interest rate is set and assigned
to them. Presently the AMPS are rated by two national credit rating
organizations, Moody's Investors Services, Inc. ("Moody's") and Standard &
Poor's ("S&P"). The ratings are presently "Aa1"(Moody's) and "AA" (S&P). In
connection with this proposal, these ratings will be upgraded to "Aaa" and "AAA"
respectively. Since auction interest rates are typically lower for AMPS and
other financial instruments that have higher/better credit ratings, the Fund
anticipates that the upgraded AMPS will receive a better auction interest rate
for the Fund and thus could reduce the expenses associated with the Fund's
leverage. Passage of the proposal will require approval by the holders of a
majority of the AMPS and a majority of the common stock voting together as a
single class, and a majority of the AMPS voting as a separate class. Upgrading
the ratings as described above is not conditioned on the passage of this
proposal as the Fund has other avenues it can pursue to upgrade the ratings
without amending the Charter.
The second non-routine proposal is a housecleaning item that resolves a
conflict between a provision in the Fund's charter that establishes the size of
the Board of Directors at five, and a provision in the terms of the AMPS that
requires an increase in the size of the Board when the AMPS dividends are in
arrears for a period of two years. Under the proposal, the charter provision
would be made subject to the provision in the terms of the AMPS.
As Chairman of the Board, I encourage you to support each of the proposals.
After careful review by those Directors who are not "interested persons" as
defined in the Investment Company Act of 1940 (the "Independent Directors"), the
Board of Directors unanimously approved and has recommended to stockholders that
they approve each of the proposals.
We hope you plan to attend the meeting. Your vote is important. Whether or
not you are able to attend, it is important that your shares be represented at
the Meeting. At your earliest convenience, we ask that you please complete,
sign, date and return the enclosed Proxy Card or authorize proxies via telephone
or the Internet to cast your vote at the meeting.
On behalf of the Board of Directors and the management of the Fund, I
extend our appreciation for your continued support.
Sincerely,
/s/ Richard I. Barr
Richard I. Barr
Chairman of the Board
[GRAPHIC OMITTED] BOULDER TOTAL RETURN FUND, INC.
1680 38TH STREET, SUITE 800
BOULDER, COLORADO 80301
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on April 24, 2006
To the Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders of Boulder
Total Return Fund, Inc., a Maryland corporation (the "Fund"), will be held at
the Scottsdale Plaza Resort, 7200 North Scottsdale Road, Scottsdale, Arizona at
9:00 a.m. Mountain Standard Time (local time), on April 24, 2006, to consider
and vote on the following Proposals, all of which are more fully described in
the accompanying Proxy Statement:
1. The election of Directors of the Fund (Proposal 1).
2. Amendments to the charter of the Fund which will repeal in their
entirety all of the currently existing terms of the Fund's taxable
auction market preferred stock and substitute in lieu thereof the new
terms set forth in the Form of Articles of Amendment attached to the
accompanying Proxy Statement as Exhibit B (Proposal 2).
3. An amendment to the charter of the Fund to provide that the number of
directors of the Fund shall be five, subject to the provisions of any
class or series of Preferred Stock (Proposal 3).
4. To transact such other business as may properly come before the
Meeting or any adjournments and postponements thereof.
The Board of Directors of the Fund has fixed the close of business on March
__, 2006 as the record date for the determination of stockholders of the Fund
entitled to notice of and to vote at the Annual Meeting and any postponements or
adjournments thereof. This Proxy Statement, Notice of Annual Meeting and proxy
card are first being mailed to stockholders on or about March __, 2006.
By Order of the Board of Directors,
/s/ Stephanie Kelley
STEPHANIE KELLEY
Secretary
March ___, 2006
--------------------------------------------------------------------------------
STOCKHOLDERS ARE REQUESTED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD OR
AUTHORIZE PROXIES VIA TELEPHONE OR THE INTERNET. THE PROXY CARD SHOULD BE
RETURNED IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE
UNITED STATES. INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES ARE SET FORTH ON
THE INSIDE COVER.
--------------------------------------------------------------------------------
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance to you and may avoid the time and expense to the Fund involved in
validating your vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. All Other Accounts: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of registration. For
example:
Registration Valid Signature
Corporate Accounts
(1) ABC Corp. ABC Corp.
(2) ABC Corp. John Doe, Treasurer
(3) ABC Corp., c/o John Doe Treasurer John Doe
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
Trust Accounts
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee, u/t/d 12/28/78 Jane B. Doe
Custodian or Estate Accounts
(1) John B. Smith, Cust., John B. Smith
f/b/o John B. Smith, Jr. UGMA
(2) John B. Smith John B. Smith, Jr., Executor
[GRAPHIC OMITTED] BOULDER TOTAL RETURN FUND, INC.
1680 38TH STREET, SUITE 800
BOULDER, COLORADO 80301
QUESTIONS & ANSWERS REGARDING THE MEETING AND PROPOSALS
Question 1: What is the purpose of the Annual Meeting?
Answer: At the Meeting, stockholders will be asked to vote on the election of
directors as well as the approval of amendments to the charter of the Fund which
will repeal in their entirety all of the currently existing terms of the Fund's
taxable auction market preferred stock (the "AMPS") and substitute in lieu
thereof the new terms set forth in the Form of Articles of Amendment attached to
the accompanying Proxy Statement as Exhibit B.
Question 2: Who is being nominated for election at the Meeting?
Answer: The Board has nominated the following five Directors, each to serve a
one-year term until the annual meeting in 2007 and until their successors are
duly elected and qualify: Richard I. Barr, Joel W. Looney, Dr. Dean L. Jacobson,
Susan L. Ciciora, and Dennis R. Causier. The holders of Common Stock will elect
three of the five directors standing for election and the holders of the AMPS
will elect the remaining two directors. Mr. Barr and Ms. Ciciora are being
nominated to represent the interests of the holders of the AMPS.
Question 3: Why is the Board recommending Proposal No. 2
Answer: If adopted, Proposal No. 2 would amend and restate the terms of the AMPS
to facilitate a rating upgrade of the AMPS. Presently, the Fund is leveraged
with $77.5 million of AMPS. The AMPS are auctioned every 28 days, at which time
a new interest rate is set and assigned to them. Presently the AMPS are rated by
two national credit rating organizations, Moody's Investors Services, Inc.
("Moody's") and Standard & Poor's ("S&P"). The ratings are presently
"Aa1"(Moody's) and "AA" (S&P). In connection with this proposal, these ratings
are expected to be upgraded to "Aaa" and "AAA" respectively. Since auction
interest rates are typically lower for AMPS and other financial instruments that
have higher/better credit ratings, the Fund anticipates that the upgraded AMPS
will receive a better auction interest rate for the Fund and thus could reduce
the expenses associated with the Fund's leverage. Upgrading the ratings as
described above is not conditioned on the passage of Proposal No. 2, as the Fund
has other avenues it can pursue to upgrade the ratings without amending the
Fund's charter. Passage of the proposal will require approval by the holders of
a majority of the AMPS and a majority of the common stock voting together as a
single class, and a majority of the AMPS voting as a separate class.
Question 4: How do the Horejsi Affiliates (as defined below at Page 2) intend to
vote on Proposal No. 2?
Answer: The Horejsi Affiliates intend to vote in favor of the proposals.
Question 5: How does the Board recommend that stockholders vote on the various
proposals?
Answer: If no instructions are indicated on your proxy, the representatives
holding proxies will vote in accordance with the recommendations of the Board.
The Board, including all of the non-interested Directors, has unanimously
recommended that stockholders vote FOR all of the Proposals.
Question 6: Who is entitled to vote?
Answer: Stockholders of record at the close of business on [March 21, 2006] (the
"Record Date") are entitled to notice of and to vote at the Meeting and any
postponements or adjournments thereof. Each of the shares outstanding on the
Record Date is entitled to one vote on each of the Proposals.
Question 7: What is the required quorum for the Meeting?
Answer: The holders of at least a majority of the outstanding shares of stock
(without regard to class) of the Fund must be represented at the Meeting, either
in person or by proxy, in order to constitute a quorum permitting business to be
conducted at the Meeting. If you have completed, executed and returned valid
proxies (in writing, by phone or by Internet) or attend the Meeting and vote in
person, your shares will be counted for purposes of determining whether there is
a quorum, even if you abstain from voting on any or all matters introduced at
the Meeting.
Question 8: How do I vote?
Answer: Your vote is very important. Stockholders can vote in person at the
Meeting or authorize proxies to cast their votes ("proxy voting") by proxy. Most
stockholders will have a choice of proxy voting over the Internet at
http://www.proxyvote.com, by using a toll-free telephone number or by completing
and signing a Proxy Card and mailing it in the postage-paid envelope provided.
Please refer to your Proxy Card or the information forwarded by your bank,
broker or other nominee to see which options are available to you. If you proxy
vote by Internet or telephone, you do NOT need to return your Proxy Card. If you
vote by proxy, the individuals named on the Proxy Card as proxy holders will
vote your shares in accordance with your instructions. You may specify whether
your shares should be voted for all, some or none of the nominees for director
and whether your shares should be voted for or against the other proposals. If
you execute an otherwise valid proxy but do not provide voting instructions, the
persons named as proxies or their substitutes will cast your votes FOR all of
the Proposals.
Question 9: Can I revoke or change my proxy?
Answer: Yes. You may change or revoke your proxy at any time before the Meeting
by timely delivery of a properly executed, later-dated proxy (including an
Internet or phone proxy), by sending a written revocation to the Secretary of
the Fund at the Fund's address listed on the accompanying Notice of Meeting, or
by attending and voting in person at the Meeting. The powers of the proxy
holders will be suspended with respect to your shares if you attend the meeting
in person and revoke your proxy, but attendance at the Meeting will not by
itself revoke a previously granted proxy.
[GRAPHIC OMITTED] BOULDER TOTAL RETURN FUND, INC.
1680 38TH STREET, SUITE 800
BOULDER, COLORADO 80301
ANNUAL MEETING OF STOCKHOLDERS
April 24, 2006
PROXY STATEMENT
This proxy statement ("Proxy Statement") for Boulder Total Return Fund, Inc., a
Maryland corporation ("BTF" or the "Fund"), is furnished in connection with the
solicitation of proxies by the Fund's Board of Directors (collectively, the
"Board" and individually, the "Directors") for use at the Annual Meeting of
Stockholders of the Fund to be held on Monday, April 24, 2006, at 9:00 a.m.
Mountain Standard Time (local time), at the Scottsdale Plaza Resort, 7200 N.
Scottsdale Drive, Scottsdale, Arizona, and at any adjournments and postponements
thereof (the "Meeting"). A Notice of Annual Meeting of Stockholders and proxy
card accompany this Proxy Statement. Proxy solicitations will be made, beginning
on or about March 6, 2006, primarily by mail, but proxy solicitations may also
be made by telephone, by Internet on the Fund's website, telegraph or personal
interviews conducted by officers of the Fund and PFPC Inc., the transfer agent
of the Fund. Any cost of proxy solicitation and expenses incurred in connection
with the preparation of this Proxy Statement and its enclosures will be paid by
the Fund. The Fund also will reimburse brokerage firms and others for their
expenses in forwarding solicitation material to the beneficial owners of its
shares. The Board has fixed the close of business on March ____, 2006 as the
record date (the "Record Date") for the determination of stockholders entitled
to notice of and to vote at the Meeting and any postponements or adjournments
thereof.
The Annual Report of the Fund, including audited financial statements for
the fiscal year ended November 30, 2005, has been mailed to stockholders.
Additional copies are available upon request, without charge, by calling
1-800-331-1710. The report is also viewable online at the Fund's website at
www.boulderfunds.net. The report is not to be regarded as proxy solicitation
material.
Boulder Investment Advisers, L.L.C. ("BIA"), 1680 38th Street, Suite 800,
Boulder, Colorado 80301 and Stewart Investment Advisers ("SIA"), Bellerive,
Queen Street, St. Peter, Barbados, currently serve as co-investment advisers to
the Fund. BIA and SIA are collectively referred to herein as the "Advisers".
Fund Administrative Services, L.L.C., serves as co-administrator to the Fund and
is located at 1680 38th Street, Suite 800, Boulder, Colorado 80301. Investors
Bank & Trust Company ("IBT") acts as the co-administrator to the Fund and is
located at 200 Clarendon Street, Boston, Massachusetts 02116. PFPC Inc. ("PFPC")
acts as the transfer agent to the Fund and is located at 4400 Computer Drive,
Westborough, Massachusetts 01581.
If the enclosed proxy is properly executed and returned by April 24, 2006
in time to be voted at the Meeting, the Shares (as defined below) represented
thereby will be voted in accordance with the instructions marked thereon. Unless
instructions to the contrary are marked thereon, a proxy will be voted FOR the
election of the nominees for Directors, FOR Proposals 2 and 3 and, in the
discretion of the proxy holder, on any other matters that may properly come
before the Meeting. Any stockholder who has given a proxy has the right to
revoke it at any time prior to its exercise either by attending the Meeting and
casting his or her votes in person or by submitting a letter of revocation or a
later-dated proxy to the Fund's Secretary at the above address prior to the date
of the Meeting.
A quorum of the Fund's stockholders is required for the conduct of business
at the Meeting. Under the Bylaws of the Fund, a quorum is constituted by the
presence in person or by proxy of the holders of a majority of the outstanding
shares (without regard to class) of the Fund as of the Record Date. In the event
that a quorum is not present at the Meeting, or in the event that a quorum is
present but sufficient votes to approve one or more proposals are not received,
the persons named as proxies may propose and vote for one or more adjournments
of the Meeting to permit further solicitation of proxies with respect to any
proposal that did not receive the votes necessary for its passage. With respect
to those proposals for which there is represented a sufficient number of votes
in favor, actions taken at the Meeting will be approved and implemented
irrespective of any adjournments with respect to any other proposals. Any such
adjournment will require the affirmative vote of a majority of votes cast on the
matter at the Meeting. If a quorum is present, the persons named as proxies will
vote those proxies which they are entitled to vote FOR any proposal in favor of
such an adjournment and will vote those proxies required to be voted AGAINST any
proposal against any such adjournment.
The Fund has two classes of stock: common stock, par value $0.01 per share (the
"Common Stock"), and preferred stock, par value $0.01 per share (the "Preferred
Stock"), 1,000 shares of which have been designated as AMPS (the Common Stock
and AMPS are collectively referred to herein as the "Shares"). On the Record
Date, the following number of Shares of the Fund were issued and outstanding:
Common Stock AMPs
Outstanding Outstanding
----------- -----------
12,338,660 775
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. The following table sets
forth certain information regarding the beneficial ownership of the Shares as of
the Record Date by each person who is known by the Fund to beneficially own 5%
or more of the Fund's outstanding Common Stock. To the Fund's knowledge, there
are no 5% or greater beneficial owners of the AMPS.
Name of Owner* Number of Shares Number of Shares Percentage
Directly Owned (1) Beneficially Owned (2) Beneficially Owned
------------------------------------------- ------------------------ -------------------------- ----------------------
Badlands Trust Company, LLC (1)(3) 0 5,382,982 43.63%
Stewart R. Horejsi Trust No. 2A (4) 0 5,382,982 43.63%
Ernest Horejsi Trust No. 1B (1) 3,413,138 3,413,138 27.66%
Lola Brown Trust No. 1B (1) 1,370,515 1,370,515 11.11%
Evergreen Atlantic LLC (1) 343,748 343,748 2.79%
Stewart West Indies Trust (1)(2) 104,627 255,876 2.07%
Susan L. Ciciora Trust (1)(2) 72,176 175,300 1.42%
John S. Horejsi Trust (1)(2) 53,080 104,642 0.85%
Evergreen Trust (1)(2) 25,698 63,510 0.51%
------------------------ -------------------------- ----------------------
Aggregate Shares Owned by Horejsi 5,382,982 5,382,982 43.63%
Affiliates (defined below) **
------------------------------------------- ------------------------ -------------------------- ----------------------
Alter Asset Management, Inc.*** 1,167,234 1,167,234 9.5%
* The address of Evergreen Atlantic LLC is 1680 38th Street, Suite 800,
Boulder, Colorado 80301. The address of each other listed owner is Badlands
Trust Company, LLC, c/o Ron Kukes, Alaska First Bank & Trust, 3301 C
Street, Suite 100, Anchorage, AK 99503.
** Aggregate number and percentage are less than the sum total of amounts
shown for each owner because the same shares may be deemed beneficially
owned by more than one party (see Footnotes 1 through 4 below).
*** As stated in a Schedule 13G filed with the Securities and Exchange
Commission on February 13, 2006.
(1) Direct Ownership. Evergreen Atlantic, LLC ("EALLC"), The Evergreen Trust
(the "Evergreen Trust"), John S. Horejsi Trust ("John Trust"), Susan L.
Ciciora Trust ("Susan Trust"), Stewart West Indies Trust ("SWI Trust"), the
Lola Brown Trust No. 1B (the "Brown Trust"), the Ernest Horejsi Trust No.
1B (the "EH Trust"), Badlands Trust Company, LLC ("Badlands"), the Stewart
R. Horejsi Trust No. 2A (the "SRH Trust") and Stewart R. Horejsi are, as a
group, considered to be a "control person" of the Fund (as that term is
defined in Section 2(a)(9) of the 1940 Act). EALLC, the Evergreen Trust,
John Trust, Susan Trust, SWI Trust, the Brown Trust, the EH Trust and
Badlands (for the purposed of this Proxy are collectively the "Horejsi
Affiliates") directly own the shares indicated for such entity in the table
above, totaling 5,382,982 (43.63%). However, these entities and other
trusts or companies with interlocking management and/or common ownership
may be deemed to indirectly own additional Fund shares, which are included
in the table above.
(2) Indirect Ownership through EALLC. Numbers shown in the table include shares
held directly (see Footnote No. 1) and shares that may be deemed to be
beneficially owned indirectly through ownership of EALLC. The outstanding
membership interests in EALLC are owned by the Evergreen Trust, the Susan
Trust, the John Trust and the SWI Trust in the following percentages - 11%,
30%, 15% and 44%. The Trustees of the Evergreen Trust are Stephen C.
Miller, Larry Dunlap and Badlands. Badlands is the sole trustee for each of
the Susan Trust, the John Trust and the SWI Trust. Mr. Horejsi is not a
beneficiary under any of the foregoing trusts. Badlands has sole discretion
with respect to the Susan Trust, John Trust and SWI Trust while any action
by the Evergreen Trust requires a majority vote of the trustees.
Consequently, both the trusts and each trustee disclaim beneficial
ownership of shares owned by EALLC. Mr. Horejsi is the manager of EALLC.
(3) Ownership by Badlands. The number shown includes shares that may be deemed
to be beneficially owned indirectly by Badlands through direct or indirect
ownership by the Brown Trust, the EH Trust, EALLC, Evergreen Trust, the
Susan Trust, the John Trust and the SWI Trust. Badlands is the sole trustee
of the Susan Trust, the John Trust and the SWI Trust, which together with
the Evergreen Trust control EALLC (see Footnote No. 2), the other two
trustees of Evergreen Trust being Stephen C. Miller and Larry Dunlap.
Badlands, together with Larry Dunlap and Susan Ciciora (Mr. Horejsi's
daughter), is one of three trustees of both the Brown Trust and the EH
Trust.
Badlands is a limited liability company organized under the laws of Alaska
authorized to do business as a trust company, which is wholly owned by the
SRH Trust, an irrevocable trust organized by Mr. Stewart Horejsi for the
benefit of his issue. The Managers of Badlands are Larry Dunlap, Stephen C.
Miller, Laura Tatooles, Laura Rhodenbaugh and Ron Kukes. Badlands and its
managers disclaim beneficial ownership of shares owned directly by the
EALLC, the Evergreen Trust, the Susan Trust, the John Trust, the SWI Trust,
the Brown Trust and the EH Trust.
(4) Indirect Ownership by SRH Trust. The number shown in the table reflects
shares that may be deemed to be beneficially owned indirectly through the
SRH Trust's ownership of Badlands. The trustees of the SRH Trust are
Badlands, Laura Tatooles and Brian Sippy. Both the Trust and its trustees
disclaim beneficial ownership of shares beneficially owned directly or
indirectly by Badlands.
----------------------------
Information as to beneficial ownership in the previous paragraph has been
obtained from a representative of the beneficial owners; all other information
as to beneficial ownership is based on reports filed with the Securities and
Exchange Commission (the "SEC") by such beneficial owners.
As of the Record Date, Cede & Co., a nominee partnership of the Depository
Trust Company, held of record, but not beneficially, 12,278,256 shares or 99.51%
of Common Stock outstanding and 775 shares or 100% of AMPS outstanding.
As of the Record Date, the executive officers and directors of the Fund, as
a group, owned 5,410,381 shares of Common Stock (this amount includes the
aggregate shares of Common Stock owned by the Horejsi Affiliates set forth
above) and 0 shares of AMPS, representing 43.85% of Common Stock outstanding and
0% of AMPS.
In order that your Shares may be represented at the Meeting, you are
requested to vote on the following matters:
PROPOSAL 1
ELECTION OF DIRECTORS OF THE FUND
The Charter provides that all of the Directors stand for election each
year. The Board has nominated the following five Director nominees to stand for
election, each for a one-year term and until their successors are duly elected
and qualify: Richard I. Barr, Joel W. Looney, Dennis R. Causier, Susan L.
Ciciora and Dr. Dean L. Jacobson. Only the Common Stock holders are entitled to
vote on the election of Messrs. Looney, Causier and Jacobson and only the AMPS
holders are entitled to vote on the election of Mr. Barr and Ms. Ciciora. At a
regularly scheduled meeting of the Board of Directors held on January 26, 2006,
Alfred G. Aldridge, Jr. notified the Board that he would not stand for
re-election as a Director of the Fund and the Board (upon recommendation of the
Nominating Committee) nominated Dennis R. Causier to fill his upcoming vacancy.
The above nominees have consented to serve as Directors if elected at the
Meeting for the one-year term. If the designated nominees decline or otherwise
become unavailable for election, however, the proxy confers discretionary power
on the persons named therein to vote in favor of a substitute nominee or
nominees for the Board.
INFORMATION ABOUT DIRECTORS AND OFFICERS. Set forth in the following table
is information about the nominees for election to the Board of Directors:
--------------------------------- ------------------------ ------------------------------------------------ -----------------
Name, Address*, Age Position, Length of Principal Occupation(s) and Other Number of Funds
Term Served, and Term Directorships Held During the Past Five Years in Fund
of Office Complex+
Overseen by
Director
--------------------------------- ------------------------ ------------------------------------------------ -----------------
Independent Directors
Richard I. Barr Director of the Fund Retired. Manager, Advantage Sales and 3
Chairman since 1999. Chairman Marketing, Inc. (food brokerage), 1963-2001;
Age: 67 of the Board since Director, Boulder Growth & Income Fund, Inc.,
2003. Current Nominee since 2002; Director, First Financial Fund,
for a term to expire Inc., since 2001.
at the 2007 annual
meeting.
Joel W. Looney, Director of the Fund Partner, Financial Management Group, LLC 3
Age: 43 since 2001. Current (investment adviser), since July 1999; CFO,
Nominee for a term to Bethany College, 1995-1999; Director, Boulder
expire at the 2007 Growth & Income Fund, Inc., since 2002 and
annual meeting. Chairman of the Board since 2004; Director and
Chairman of the Board, First Financial Fund,
Inc., since 2003.
Dennis R. Causier** Current Nominee for a Retired. Managing Director and Chairman, P.S. 2
Age: 57 term to expire at the Group, PLC (engineering and construction),
2007 annual meeting. 1966-2001; Owner, Professional Yacht
Management Services (yacht management),
2002-present. Director, Boulder Growth &
Income Fund, Inc., since 2004; Director, First
Financial Fund, Inc., since 2004.
Dr. Dean L. Jacobson Director of the Fund Founder and President of Forensic Engineering, 2
Age: 67 since October 2004. Inc. (engineering investigations); since 1997,
Current Nominee for a Professor Emeritus at Arizona State
term to expire at the University; prior to 1997, Professor of
2007 annual meeting. Engineering at Arizona State University;
Director, First Financial Fund, Inc., since
2003.
--------------------------------- ------------------------ ------------------------------------------------ -----------------
Interested Director***
--------------------------------- ------------------------ ------------------------------------------------ -----------------
Susan L. Ciciora Director of the Fund Trustee of the Brown Trust and the EH Trust; 1
Age: 41 since 2001. Current Director of Horejsi Charitable Foundation,
nominee for a term to Inc. (private charitable foundation), since
expire at the 2007 1997; Director, Boulder Growth & Income Fund,
annual meeting. Inc., January 2002 to October 2004; Director,
First Financial Fund, Inc., since 2003.
* Unless otherwise specified, the Directors' respective addresses are c/o
Boulder Total Return Fund, Inc., 1680 38th Street, Suite 800, Boulder, Colorado
80301.
** Mr. Causier is a British citizen and a resident of Spain and substantially
all of his assets are located outside of the United States. As a result, it may
be difficult to realize claims in courts of the United States predicated upon
civil liabilities under federal securities laws of the United States. The Fund
has been advised that there is substantial doubt as to (i) the enforceability in
Spain of such civil remedies and criminal penalties as are afforded by the
federal securities laws of the United States, (ii) whether the Spanish courts
would enforce judgments of United States courts obtained in actions against Mr.
Causier predicated upon the civil liability provisions of the federal securities
laws, or (iii) whether Spanish courts would enforce, in an original action,
liabilities against Mr. Causier predicated solely on federal securities laws.
Mr. Causier has appointed the Secretary of the Fund (presently Stephanie Kelley
in Boulder, Colorado) as his agent for service of process in any legal action in
the United States, thus subjecting him to the jurisdiction of the United States
courts
*** Ms. Ciciora is an "interested person" as a result of the extent of her
beneficial ownership of Fund shares and by virtue of her indirect beneficial
ownership of BIA and FAS.
+ Includes the Fund, Boulder Growth & Income Fund, Inc. and First Financial
Fund, Inc.
----------------------------
From the late 1980's until January, 2001, Mr. Looney served, without
compensation, as one of three trustees of the Mildred Horejsi Trust, an
affiliate of the EH Trust.
The names of the executive officers of the Fund are listed in the table
below. Each officer was elected to office by the Board at a meeting held on
April 26, 2005. This table also shows certain additional information. Officers
are elected annually and each officer will hold such office until a successor
has been elected by the Board.
------------------------------ -------------------------- ----------------------------------------------------------
Position, Length of
Name, Address, Age Term Served, and Term of Principal Occupation(s) and Other Directorships held
Office During the Past Five Years
------------------------------ -------------------------- ----------------------------------------------------------
Stephen C. Miller President of the Fund President of and General Counsel for BIA since 1999;
1680 38th Street, since 1999 and Director Manager, Fund Administrative Services, LLC ("FAS") since
Suite 800 from 1999 through 1999; Vice President of SIA since 1999; Director and
Boulder, CO 80301 October 2004. Appointed President of Boulder Growth & Income Fund, Inc., since
Age: 53 annually. 2002 (resigned as Director in 2004); Director and
President of First Financial Fund, Inc. since 2003 (resigned
as Director and Chairman in 2004); President and General
Counsel, Horejsi, Inc. (liquidated in 1999); General Counsel,
Brown Welding Supply, LLC (sold in 1999); officer of various
other Horejsi Affiliates; Of Counsel, Krassa & Miller, LLC
since 1991.
Carl D. Johns Chief Financial Officer, Vice President and Treasurer of BIA and Assistant
1680 38th Street, Chief Accounting Manager of FAS, since April, 1999; Vice President, Chief
Suite 800 Officer, Vice President Financial Officer and Chief Accounting Officer, Boulder
Boulder, CO 80301 and Treasurer since Growth & Income Fund, Inc., since January 2002 and First
Age: 43 1999. Appointed Financial Fund, Inc., since August 2003.
annually.
Stephanie J. Kelley Secretary since 2000. Secretary, Boulder Growth & Income Fund, Inc., since
1680 38th Street, Appointed annually. January 2002 and First Financial Fund, Inc., since
Suite 800 August 2003; Assistant Secretary and Assistant Treasurer
Boulder, CO 80301 of various other entities affiliated with the Horejsi
Age: 49 family; employee of FAS since March 1999.
Nicole L. Murphey Assistant Secretary Assistant Secretary, Boulder Growth & Income Fund, Inc.
1680 38th Street, since 2000. Appointed since January 2002 and First Financial Fund, Inc. since
Suite 800 annually. August 2003; employee of FAS since July 1999.
Boulder, CO 80301
Age: 29
Set forth in the following table are the nominees for election to the Board
together with the dollar range of equity securities beneficially owned by each
Director as of the Record Date, as well as the aggregate dollar range of the
Fund's equity securities in all funds overseen in a family of investment
companies (i.e., other funds managed by BIA and SIA (collectively, the
"Advisers")).
OWNERSHIP OF THE FUND BY DIRECTORS
---------------------------------------------------------------------------------------------------------
-------------------------------------- -------------------------------- ---------------------------------
Independent Directors and Nominees Dollar Range of Equity Aggregate Dollar Range of
Securities in the Fund Equity Securities in All Funds
in the Family of Investment
Companies
-------------------------------------- -------------------------------- ---------------------------------
Richard I. Barr Over $100,000 Over $100,000
Joel W. Looney $50,001 to $100,000 Over $100,000
Dean L. Jacobson $10,001 to $50,000 $10,001 to $50,000
Dennis R. Causier Under $10,000 $50,001 to $100,000
Interested Directors and Nominees
-------------------------------------- -------------------------------- ---------------------------------
Susan L. Ciciora Over $100,000+ Over $100,000
+ 3,413,138, 343,748 and 1,370,515 Shares of the Fund are held by the EH Trust,
EALLC and the Lola Trust, respectively. Accordingly, Ms. Ciciora may be deemed
to have indirect beneficial ownership of such Shares. Ms. Ciciora disclaims all
such beneficial ownership. Ms. Ciciora directly owns 6,267 shares of the Fund.
---------------------------
None of the independent Directors or their family members owned
beneficially or of record any securities of the Advisers or any person directly
or indirectly controlling, controlled by, or under common control with the
Advisers.
DIRECTOR AND OFFICER COMPENSATION. The following table sets forth certain
information regarding the compensation of the Fund's Directors for the fiscal
year ended November 30, 2005. No persons (other than the independent Directors,
as set forth below) currently receive compensation from the Fund for acting as a
Director or officer. Directors and executive officers of the Fund do not receive
pension or retirement benefits from the Fund. Non-interested Directors receive
reimbursement for travel and other out of pocket expenses incurred in connection
with Board meetings.
Aggregate
Compensation
Name of Person and Position with the from the Fund Total Compensation from
Fund Paid to the Fund and Fund Complex
Directors Paid to Directors
----------------------------------------- ------------------- ----------------------------
Alfred G. Aldridge, Jr., Director $29,000 $54,000
(2 funds)
Richard I. Barr, Director and Chairman $33,000 $87,000
of the Board (3 funds)
Joel W. Looney, Director $32,000 $100,000
(3 funds)
Dr. Dean Jacobson, Director $29,000 $57,500
(2 funds)
Dennis R. Causier, Director Nominee $0 $53,500
(2 funds)
Susan L. Ciciora, Director $0 $0
Each Director of the Fund who was not a Director, officer or employee of
one of the Advisers, or any of their affiliates, receives a fee of $8,000 per
annum plus $4,000 for each in person meeting, $500 for each Audit Committee
meeting and $500 for each telephonic meeting of the Board. In addition, the
Chairman of the Board and the Chairman of the Audit Committee receives $1,000
per meeting. Each non-interested Director of the Fund is reimbursed for travel
and out-of-pocket expenses associated with attending Board and Committee
meetings. The Board held ten meetings (six of which were held by telephone
conference call) during the fiscal year ended November 30, 2005. Each Director
currently serving in such capacity for the entire fiscal year attended at least
75% of the meetings of Directors and any Committee of which he is a member.
Directors currently serving and who served less than the entire fiscal year
attended at least 75% of such meetings held during their tenure as a Director.
The aggregate remuneration paid to the Directors of the Fund for acting as such
during the fiscal year ended November 30, 2005 amounted to $123,000.
COMMITTEES OF THE BOARD OF DIRECTORS
AUDIT COMMITTEE; REPORT OF AUDIT COMMITTEE. The purpose of the Audit
Committee is to assist Board oversight of the integrity of the Fund's financial
statements, the Fund's compliance with legal and regulatory requirements, the
independent auditor's qualifications and independence and the performance of the
Fund's independent auditors. The Audit Committee reviews the scope and results
of the Fund's annual audit with the Fund's independent accountants and
recommends the engagement of such accountants. Management, however, is
responsible for the preparation, presentation and integrity of the Fund's
financial statements, and the independent accountants are responsible for
planning and carrying out proper audits and reviews. The Board of Directors
adopted a written charter for the Audit Committee on January 23, 2002 and most
recently amended the Charter on January 23, 2004. A copy of the Audit Committee
Charter was attached as an appendix to the Fund's 2004 annual proxy statement.
The Audit Committee is composed entirely of the Fund's independent
Directors, consisting of Messrs. Aldridge, Barr, Jacobson and Looney. The Board
of Directors has determined that Joel Looney qualifies as an "audit committee
financial expert," as defined under the Securities and Exchange Commission's
Regulation S-K, Item 401(h). The Audit Committee is in compliance with
applicable rules of the listing requirements for closed-end fund audit
committees, including the requirement that all members of the audit committee be
"financially literate" and that at least one member of the audit committee have
"accounting or related financial management expertise," as determined by the
Board. The Audit Committee is required to conduct its operations in accordance
with applicable requirements of the Sarbanes-Oxley Act and the Public Company
Accounting Oversight Board, and the members of the Audit Committee are subject
to the fiduciary duty to exercise reasonable care in carrying out their duties.
Each member of the Audit Committee is independent, as that term is defined by
the NYSE Listing Standards. The Audit Committee met four times during the fiscal
year ended November 30, 2005.
In connection with the audited financial statements as of and for the
period ended November 30, 2005, included in the Fund's Annual Report for the
period ended November 30, 2005 (the "Annual Report"), at a meeting held on
January 26, 2006, the Audit Committee considered and discussed the audited
financial statements with management and the independent accountants, and
discussed the audit of such financial statements with the independent
accountants.
The Audit Committee has received the written disclosures and letter from
the independent accountants required by Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees) and has discussed with
independent accountants their independence. The Audit Committee discussed with
the independent accountants the accounting principles applied by the Fund and
such other matters brought to the attention of the Audit Committee by the
independent accountants required by Statement of Auditing Standards No. 61,
Communications With Audit Committees, as currently modified or supplemented.
The members of the Audit Committee are not professionally engaged in the
practice of auditing or accounting and are not employed by the Fund in any
accounting, financial management or internal control capacity. Moreover, the
Audit Committee relies on and makes no independent verification of the facts
presented to it or representations made by management or the independent
accountants. Accordingly, the Audit Committee's oversight does not provide an
independent basis to determine that management has maintained appropriate
accounting and financial reporting principles and policies, or internal controls
and procedures, designed to assure compliance with accounting standards and
applicable laws and regulations. Furthermore, the Audit Committee's
considerations and discussions referred to above do not provide assurance that
the audit of the Fund's financial statements has been carried out in accordance
with generally accepted accounting standards or that the financial statements
are presented in accordance with generally accepted accounting principles.
Based on its consideration of the audited financial statements and the
discussions referred to above with management and the independent accountants
and subject to the limitation on the responsibilities and role of the Audit
Committee set forth in the charter and those discussed above, the Audit
Committee of the Fund recommended to the Board that the audited financial
statements be included in the Fund's Annual Report and be mailed to stockholders
and filed with the SEC.
Submitted by the Audit Committee of the Fund's Board of Directors:
Alfred G. Aldridge, Jr.
Richard I. Barr
Dean L. Jacobson
Joel W. Looney
NOMINATING COMMITTEE. The Board of Directors has a nominating committee
(the "Nominating Committee") consisting of Messrs. Looney, Jacobson, Aldridge
and Barr, which is responsible for considering candidates for election to the
Board in the event a position is vacated or created. Each member of the
Nominating Committee is independent, as that term is defined by the NYSE Listing
Standards. The Nominating Committee did not meet during the fiscal year ended
November 30, 2005. The Nominating Committee met on January 16, 2006 and again on
January 26, 2006, to consider the nomination of Dennis R. Causier. Dennis R.
Causier was being considered to fill a vacancy on the Board resulting from the
resignation of Alfred G. Aldridge, Jr. At this meeting, the Nominating Committee
considered the qualifications and determined the suitability of Dennis R.
Causier to be Director and resolved to recommend Dennis R. Causier to
stockholders for election at the 2006 Annual Meeting.
The Board of Directors has adopted a charter for the Nominating Committee that
is available on the Fund's website, www.boulderfunds.net. The Nominating
Committee does not have a formal process for identifying candidates. The
Nominating Committee takes into consideration such factors as it deems
appropriate when nominating candidates. These factors may include judgment,
skill, diversity, experience with investment companies and other organizations
of comparable purpose, complexity, size and subject to similar legal
restrictions and oversight, the interplay of the candidate's experience with the
experience of other Board members, and the extent to which the candidate would
be a desirable addition to the Board and any committees thereof. The Nominating
Committee will consider all qualified candidates in the same manner. The
Nominating Committee may modify its policies and procedures for director
nominees and recommendations in response to changes in the Fund's circumstances,
and as applicable legal or listing standards change.
The Nominating Committee would consider director candidates recommended by
stockholders (if a vacancy were to exist) and submitted in accordance with
applicable law and procedures as described in this Proxy Statement (see
"Submission of Stockholder Proposals" below). Such recommendations should be
forwarded to the Secretary of the Fund.
The Fund does not have a compensation committee.
OTHER BOARD-RELATED MATTERS
Stockholders who wish to send communications to the Board should send them
to the address of the Fund and to the attention of the Board. All such
communications will be directed to the Board's attention.
The Fund does not have a formal policy regarding Board member attendance at
the Annual Meeting of Stockholders; however, all of the Directors of the Fund,
who were Directors at the time, attended the April 26, 2005 Annual Meeting of
Stockholders.
Vote Required. The election of Messrs. Looney, Jacobson and Causier as
Directors of the Fund will require the affirmative vote of a plurality of the
votes cast by holders of the Common Stock at the Meeting in person or by proxy
on Proposal 1. The election of Mr. Barr and Ms. Ciciora as Directors of the Fund
will require the affirmative vote of a plurality of the votes cast by the
holders of the AMPS at the Meeting in person or by proxy on Proposal 1.
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS, UNANIMOUSLY
RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE ELECTION OF ALL THE NOMINEES.
PROPOSAL 2
CHARTER AMENDMENTS RELATING TO THE TERMS OF THE AMPS
The second proposal to be considered at the Meeting is approval of amendments to
the charter of the Fund, which will repeal in their entirety all of the
currently existing terms of the Fund's taxable auction market preferred stock
(the "AMPS") and substitute in lieu thereof the new terms set forth in the
proposed Form of Articles of Amendment for the Fund (the "Articles") described
below and attached to this Proxy Statement as Exhibit [B] (the "Amendments").
The Board proposes and unanimously recommends that stockholders approve the
Amendments.
Purpose of the Amendments. Presently, the Fund is leveraged with $77.5 million
of taxable auction market preferred stock. The AMPS are auctioned through a
Dutch auction process every 28 days at which time a new interest rate is set.
Presently the AMPS are rated by two national credit rating organizations,
Moody's Investors Services, Inc. ("Moody's") and Standard & Poor's ("S&P")
(Moody's and S&P are collectively referred to as the "Rating Agencies"). The
ratings are presently "Aa1" from Moody's and "AA" from S&P (the "Ratings").
Since auction market preferred rates are typically lower for auction market
preferred stocks that have higher/better credit ratings, the Fund anticipates
that, if upgraded, the AMPS will typically receive better auction interest rates
for the Fund, thus reducing the dividend expenses associated with the Fund's
leverage. Accordingly, management has recommended that the Ratings be upgraded
to "Aaa" and "AAA" respectively.
Because the conditions for upgrading the AMPS to "Aaa" and "AAA" rated
instruments are largely a factor of asset coverage, and because most of the
asset coverage definitions and calculations are set forth in the charter of the
Fund, including the Articles Supplementary setting forth the terms of the AMPS
(the "Current AMPS Terms"), upgrading the AMPS will require extensive revisions
to the Current AMPS Terms. In addition to amending the coverage definitions and
calculation provisions of the Current AMPS Terms, management has recommended
that the Fund also amend the Current AMPS Terms to deal with market
interruptions resulting from force majeure events such as the 9-11 terrorist
attacks and the termination of AMPS-elected directors upon the Fund's complete
redemption of the AMPS. These last two provisions are commonplace in the
governing documents for recently issued auction market preferred stock. Finally,
the Current AMPS Terms are amended versions from an original that is almost 20
years old which were extensively revised in 2000 to deal with changing rating
agencies and changing from a dividend-received-deduction-eligible product to a
taxable product. Management believes that, since it must extensively amend the
Current AMPS Terms in any event in connection with upgrading the AMPS, the
Amendments will vastly simplify the Current AMPS Terms, eliminate ambiguities
and inconsistencies, and bring the Current AMPS Terms into conformity with
current rating agency and auction market preferred practices. Upgrading the
Ratings as described above is not conditioned on the passage of this Proposal as
the Fund has other avenues it can pursue to upgrade the Ratings without amending
the Current AMPS Terms.
At Board Meetings held in July and October of 2005 and January 2006, the Board
considered recommendations from management to upgrade the AMPS as discussed
above. At the January 2006 Board meeting, the Board approved a recommendation
from management to upgrade the Ratings and, in connection therewith, the
Amendments, subject to shareholder approval and subject to receipt of certain
confirmations from the Rating Agencies. The Board considered a number of factors
in its deliberations, including that (i) upgrading the AMPS from the current
"Aa1" and "AA" ratings to "Aaa" and "AAA" should reduce the Fund's relative cost
of leverage; (ii) extensive amendment of the Current AMPS Terms is necessary to
facilitate the upgrade of the AMPS in any event; (iii) the Amendments will
modernize the Current AMPS Terms and simplify and streamline the auction
procedures, coverage calculations and other testing and oversight procedures of
the Current AMPS Terms; (iv) the Amendments will not adversely affect the AMPS
or the contract rights of the AMPS nor will it impair the ratings by the Rating
Agencies, indeed it will enhance the ratings; (v) with respect to changes to
deal with force majeure events, the Amendments ensure that, if a terrorist
attack or other force majeure event were to occur, the AMPS auction can be
conducted pursuant to clear procedures set forth in the Amendments and without
detriment to the Fund or its holders of Common Stock; and (vi) with respect to
termination of the AMPS directors upon redemption of the AMPS, in the event of a
redemption in full of the AMPS, separate representatives for the AMPS would
serve no valid business purpose. Finally, the Board found that the Amendments
were consistent with current market practice for new issuances of auction market
preferred stock. Indeed, the Fund's sister fund, Boulder Growth & Income Fund,
Inc. recently issued "AAA" rated auction market preferred stock with
substantially the same terms as those proposed under this Proposal. Accordingly,
for the foregoing reasons, the Board found that the Amendments were in the best
interest of the Fund. The Fund has had conversations with both Rating Agencies
about the Amendments. The Rating Agencies have indicated preliminarily that the
changes would not impair their ratings on the AMPS. In any event, the Amendments
will not be implemented unless both Rating Agencies confirm that the Amendments
will not impair the Ratings.
The following Comparison Table summarizes the proposed Amendments to the Current
AMPS Terms. This summary is qualified in its entirety by reference to the
Amendments as set forth in the Form of Articles of Amendment attached to this
Proxy Statement as Exhibit B.
Comparison Table
Current AMPS Terms versus Amended AMPS Terms
Provision or Subject Current AMPS Terms Proposed Amended AMPS Terms
---------------------------- -------------------------------------------------- -------------------------------------------------
Determination and Payment The Fund's auctions are held every fourth There are no substantive changes.
of Dividends Tuesday and dividends for the preceding period
are paid on the Wednesday immediately following
each auction date. The dividend rate is set by
auction.
Auction Procedures There are no substantive changes.
Force Majeure Events The Current AMPS Terms do not provide for The Amendments contain provisions establishing
auction procedures in the event of a terrorist procedures to be followed in instances where an
attack or other force majeure event that affects AMPS auction cannot be held, or the auction
the national markets. agent for the Fund is not able to conduct an
auction in accordance with the established
auction procedures, or the dividend payable
on such date cannot be paid because
the date on which the auction normally would be held
(or thedividend would be paid) is not a business
day because the NYSE is closed because of an
Extraordinary Event (e.g., an act of God, natural
disaster, extreme weather, act of war, civil or
military disturbance, act of terrorism, sabotage,
riots or a loss or malfunction of
utilities or communications services). The
Amendments establish how the dividend rate is
determined, when the dividend will be paid,
and how a dividend period will be established
if an Extraordinary Event occurs.
Termination of AMPS The Current AMPS Terms do not provide for Under the Current AMPS Terms and the 1940
Directors upon Redemption termination of the AMPS Directors upon a Act, holders of the AMPS, voting as a single
of the AMPS redemption of the AMPS. class, are entitled to elect two of the Fund's
directors while holders of the Common Stock are
entitled to elect the remaining directors. The
Amendment provides that directors elected by
holders of the AMPS will terminate automatically
upon full redemption of the AMPS. Notably, in
such a redemption in full, all obligations to
the AMPS holders will cease and separate
representatives for them would serve no valid
business purpose. Moreover, in this circumstance,
the 1940 Act provision requiring separate
representatives for holders of preferred stock
would no longer apply.
Rating Agency
Guidelines The Rating Agency guidelines were The Rating Agency guidelines are only referenced in
incorporated in various provisions throughout the Amendment, thus giving the Rating Agencies the
the text of the Current AMPS Terms. ability to amend the guidelines without amending the
terms of the AMPS.
Amendment or Modification Without the affirmative vote of at least a The provisions in the Amendment are
- Stockholder Approval majority of the AMPS shares, the Fund may not substantially the same as those in the Current
Required amend, alter or repeal the AMPS terms so as to AMPS Terms.
adversely affect in any material respect any of the
contract rights associated with the AMPS or alter,
modify or eliminate any of the rights, preferences
or privileges of the AMPS so as to adversely affect
the AMPS.
Amendment or Modification The Board, without the vote or consent of the The Amendments provide that the rights of the
- No Stockholder Approval AMPS stockholders, may from time to time amend AMPS or the holders thereof, including, without
Required the Current AMPS Terms, if (A) such amendment, limitation, the interpretation or applicability
alteration or repeal is at the request of a of any or all covenants or other obligations of
Rating Agency and (B) it is determined by the the Fund contained in the AMPS terms or of
Board that the amendment will not adversely certain definitions in the AMPS terms, may from
affect the contract rights of shares of AMPS or time to time be modified, altered or repealed
adversely affect the AMPS as supported by the by the Board of Directors in its sole
Fund's counsel's opinion. discretion, based on a determination by the
Board of Directors that such action is
necessary or appropriate in connection with
obtaining or maintaining the rating of any Rating
Agency with respect to the AMPS or revising the
Fund's investment restrictions or policies
consistent with guidelines of any Rating Agency,
and any such modification, alteration or repeal
will not be deemed to affect the preferences,
rights or powers of AMPS or the holders thereof,
provided that the Board of Directors
receives written confirmation from each relevant
Rating Agency that any such modification,
alteration or repeal would not adversely affect
the rating then assigned by such Rating Agency.
Amendment of Certain The Board, without the vote or consent of the The Amendment contains substantially similar
Rating Agency Definitions AMPS stockholders, may from time to time amend language. However, in addition, the Rating
certain rating agency definitions provided that Agency guidelines, which contain most of the the
Board receives confirmation from the Rating Rating Agency definitions, may be amended by
Agencies that the amendment does not impair the the respective Rating Agency without the vote,
Ratings then assigned. consent or approval of the Board, or any holder
of shares of the AMPS, including any series
of AMPS, or any other stockholder of the Fund.
Increases in Capitalization The affirmative vote of at least 80% of the AMPS The Board is permitted to cause the issuance of
shares is required to authorize, create or issue additional shares of the AMPS or other
any class or series of stock ranking prior to or preferred stock ranking on a parity with the
on a parity with the AMPS with respect to the AMPS if the Fund obtains written confirmation
payment of dividends or the distribution of from the Rating Agencies that the issuance of a
assets upon dissolution, liquidation or winding class or series would not impair the rating
up of the affairs of the Fund. then assigned by such rating agency to the
AMPS. Otherwise, the affirmative vote of a
majority of outstanding AMPS shares is required to
issue additional AMPS or other preferred shares.
Dividend Payment Dates Every fourth Wednesday, subject to adjustments No changes.
for special rate periods.
Maximum Length of Special There is no express limit on the length of a Designation of special dividend periods longer
Rate Periods special rate period. than 28 days are limited to a maximum of 5
years.
Late Charge on Any Failure The late charge is calculated using 275% of the The late charge is calculated using 300% of the
to Deposit "AA" composite commercial paper rate. LIBOR rate.
Designation of AMPS There are no provisions regarding how AMPS The Board determines which Directors are to be
Directors Directors are designated or which Directors are designated AMPS Directors and elected by the
to be AMPS Directors and elected by the holders holders of the AMPS.
of the AMPS.
Special Meetings to Elect Special meetings for the election of additional Special meetings for the election of additional
Additional AMPS Directors AMPS directors (e.g., if the Fund fails to pay AMPS directors are to be held not less than 10
its AMPS dividend) are to be held not less than nor more than 20 days after mailing the notice.
10 nor more than 30 days after mailing the
notice.
Restrictions on Dividends No dividends may be declared or paid or set No substantive changes.
apart for payment on any of the Fund's
securities ranking, as to the payment of
dividends, on a parity with the AMPS unless full
cumulative dividends have been or
contemporaneously are declared and paid on the
shares of AMPS and any other parity stock
through the most recent dividend payment date.
When dividends are not so paid on the AMPS or
other parity stock, all dividends declared upon
shares of AMPS and any other such parity stock
shall be declared pro rata. The AMPS shall not
be entitled to any dividend, whether payable in
cash, property or stock, in excess of full
cumulative dividends.
As long as any the AMPS are outstanding, the Fund
may not declare, pay or set apart for payment any
dividend or other distribution in respect of the
Common Stock or any other stock of the Fund ranking
junior to the AMPS or call for redemption, redeem,
purchase or otherwise acquire for consideration any
Common Stock or any other shares of the Corporation
ranking junior to the AMPS as to dividends or upon
liquidation, unless (i) immediately thereafter, the
1940 Act asset coverage is met and the various
Rating Agency asset coverage ratios are met, (ii)
full cumulative dividends on all shares of AMPS for
all past rate periods have been paid or declared
and a sum sufficient for the payment of such
dividends set apart for payment; and (iii) the Fund
the Corporation has redeemed the full number of
shares of AMPS required to be redeemed by any
provision for mandatory redemption.
Redemption The Fund may redeem the AMPS in whole but not in The Fund may redeem in whole or part upon prior
part upon prior notice (i.e., not less than 3 notice (i.e., not less than 15 calendar days
nor more than 33 days). and not more than 40 calendar days).
Notice for mandatory redemption is not less than Notice for mandatory redemption is not less than 15
3 nor more than 33 days. calendar days nor more than 40 calendar days.
Status of AMPS Redeemed Redeemed AMPS return to the status of authorized Redeemed AMPS return to the status of
and unissued shares of AMPS. authorized and unissued shares of preferred
stock, without further designation.
Liquidation Rights No substantive changes.
Vote Required. Approval of the Amendments will require the affirmative vote of
(a) a majority of the votes entitled to be cast by the holders of Common Stock
and AMPS, voting together as a single class and (b) a majority of the votes
entitled to be cast by the holders of the AMPS, voting as a separate class.
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS, UNANIMOUSLY
RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" PROPOSAL 2.
PROPOSAL 3
AMENDMENT TO THE CHARTER WITH RESPECT TO THE NUMBER OF DIRECTORS
The Board proposes and unanimously recommends that stockholders approve an
amendment to the Fund's Charter to provide Section 5.1 of the Charter, which
states that the number of directors of the Fund shall be five, be made subject
to the provisions of the AMPS or any new class or series of preferred stock of
the Fund. Both the Current AMPS Terms as well as the Amendments contemplated
under Proposal 2 above provide for increasing the size of the Board under
certain limited circumstances (e.g., if the Fund has not paid the dividends
under the AMPS) so as to give the holders of the AMPS the ability to elect a
majority of the Directors. However, given the language of Section 5.1, it is
unclear whether the size of the Board could be legally increased under the terms
of the Current AMPS Terms in order to give the AMPS holders the majority
contemplated under the 1940 Act.
Section 5.1 of the Charter reads as follows:
The number of directors shall be five.
Proposal 3 would amend Section 5.1 of the Charter to read, in its entirety, as
follows:
Subject to the terms of any class or series of Preferred Stock, the number
of directors shall be five.
Purpose of the Amendment. The purpose of this Proposal is to eliminate the
conflict between (i) the language of Section 5.1 of the Charter which, in its
present form, clearly sets the number of Directors at five, (ii) the
requirements imposed by the AMPS terms for the protection of the holders of the
AMPS and (iii) the requirements imposed by the 1940 Act which require provisions
to be made to allow the holders of the AMPS to elect a majority of the Directors
at any time dividends remain unpaid for a period of two years.
The Board considered this Proposal at a special meeting held on March 6, 2006.
The Board has determined that this Proposal is advisable to conform with the
1940 Act and the intent of the AMPS terms.
Vote Required. Approval of Proposal 3 requires the affirmative vote of a
majority of the votes entitled to be cast on the matter by the holders of the
Common Stock and AMPS, voting as a single class.
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS, UNANIMOUSLY
RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" PROPOSAL 3.
SUBMISSION OF STOCKHOLDER PROPOSALS
Notice is hereby given that for a stockholder proposal to be considered for
inclusion in the Fund's proxy material relating to its 2007 annual meeting of
stockholders, the stockholder proposal must be received by the Fund no later
than November 15, 2006 [Based on a March 15, 2006 mailing date]. Any such
proposal shall set forth as to each matter the stockholder proposes to bring
before the meeting (i) a brief description of the business desired to be brought
before the meeting and the reasons for conducting such business at the meeting,
(ii) the name and address, as they appear on the Fund's books, of the
stockholder proposing such business, (iii) the class and number of shares of the
capital stock of the Fund which are beneficially owned by the stockholder, and
(iv) any material interest of the stockholder in such business. Stockholder
proposals, including any accompanying supporting statement, may not exceed 500
words. A stockholder desiring to submit a proposal must be a record or
beneficial owner of Shares with a market value of $2,000 and must have held such
Shares for at least one year. Further, the stockholder must continue to hold
such Shares through the date on which the meeting is held. Documentary support
regarding the foregoing must be provided along with the proposal. There are
additional requirements regarding proposals of stockholders, and a stockholder
contemplating submission of a proposal is referred to Rule 14a-8 promulgated
under the 1934 Act. The timely submission of a proposal does not guarantee its
inclusion in the Fund's proxy materials.
Pursuant to the Fund's By-laws, at any annual meeting of the stockholders,
only business that has been properly brought before the meeting will be
conducted. To be properly brought before the annual meeting, the business must
be (i) specified in the notice of meeting, (ii) by or at the direction of the
Board of Directors, or (iii) otherwise properly brought before the meeting by a
stockholder. For business to be properly brought before the annual meeting by a
stockholder, the stockholder must have given timely notice thereof in writing to
the Secretary of the Fund. To be timely, a stockholder's notice must be
delivered to the Secretary at 1680 38th Street, Suite 800, Boulder, Colorado
80301 no later than 5:00 p.m., Mountain Time, on the 120th day prior to the
first anniversary of the date of mailing of the notice for the preceding year's
annual meeting. However, if the date of the annual meeting is advanced or
delayed by more than 30 days from the first anniversary of the date of the
preceding year's annual meeting, for notice by the stockholder to be timely, it
must be delivered not later than 5:00 p.m., Mountain Time, on the later of the
120th day prior to the date of such annual meeting or the tenth day following
the day on which public announcement of the date of such meeting is first made.
The public announcement of a postponement or adjournment of an annual meeting
shall not commence a new time period for the giving of a stockholder's notice as
described above.
Pursuant to the Fund's By-laws, such stockholder's notice shall set forth
(i) as to each individual whom the stockholder proposes to nominate for election
or reelection as a director, (A) the name, age, business address and residence
address of such individual, (B) the class, series and number of any shares of
stock of the Fund that are beneficially owned by such individual, (C) the date
such shares were acquired and the investment intent of such acquisition, (D)
whether such stockholder believes any such individual is, or is not, an
"interested person" of the Fund, as defined in the 1940 Act and information
regarding such individual that is sufficient, in the discretion of the Board of
Directors or any committee thereof or any authorized officer of the Fund, to
make such determination and (E) all other information relating to such
individual that is required to be disclosed in solicitations of proxies for
election of directors in an election contest (even if an election contest is not
involved), or is otherwise required, in each case pursuant to Regulation 14A (or
any successor provision) under the Exchange Act and the rules thereunder
(including such individual's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected); (ii) as to any
other business that the stockholder proposes to bring before the meeting, a
description of such business, the reasons for proposing such business at the
meeting and any material interest in such business of such stockholder and any
Stockholder Associated Person (as defined below), individually or in the
aggregate, including any anticipated benefit to the stockholder and the
Stockholder Associated Person therefrom; (iii) as to the stockholder giving the
notice and any Stockholder Associated Person, the class, series and number of
all shares of stock of the Fund which are owned by such stockholder and by such
Stockholder Associated Person, if any, and the nominee holder for, and number
of, shares owned beneficially but not of record by such stockholder and by any
such Stockholder Associated Person; (iv) as to the stockholder giving the notice
and any Stockholder Associated Person covered by the immediately preceding
clauses (ii) or (iii), the name and address of such stockholder, as they appear
on the Fund's stock ledger and current name and address, if different, and of
such Stockholder Associated Person; and (v) to the extent known by the
stockholder giving the notice, the name and address of any other stockholder
supporting the nominee for election or reelection as a director or the proposal
of other business on the date of such stockholder's notice. "Stockholder
Associated Person" of any stockholder shall mean (i) any person controlling,
directly or indirectly, or acting in concert with, such stockholder, (ii) any
beneficial owner of shares of stock of the Fund owned of record or beneficially
by such stockholder and (iii) any person controlling, controlled by or under
common control with such Stockholder Associated Person.
ADDITIONAL INFORMATION
INDEPENDENT ACCOUNTANTS. The Audit Committee of the Board, consisting of
those Directors who are not "interested persons" (as defined in the 1940 Act),
will select the Fund's independent accountants for the Fund's fiscal year ending
November 30, 2006 at the Board's regular quarterly meeting in July 2006. KPMG
served as independent accountants for the Fund for the Fund's fiscal year ending
November 30, 2005. A representative of KPMG will not be present at the Meeting
but will be available by telephone and will have an opportunity to make a
statement if the representative so desires and will be available to respond to
appropriate questions.
Set forth below are audit fees and non-audit related fees billed to the
Fund for professional services received from KPMG for the Fund's fiscal years
ended November 30, 2004 and 2005, respectively.
Fiscal Year Ended Audit Fees Audit-Related Fees* Tax Fees** All Other Fees
11/30/2004 $23,600 $16,000 $5,850 $0
11/30/2005 $25,250 $16,800 $6,000 $0
* "Audit Related Fees" are those fees billed to the Fund by KPMG in
connection with their agreed-upon procedures reports under the terms of the
AMPS. Such reports are required quarterly by Moody's Investors Service,
Inc. and Standard & Poor's in connection with maintaining public ratings
for the AMPS.
** "Tax Fees" are those fees billed to each Fund by KPMG in connection with
tax consulting services, including primarily the review of each Fund's
income tax returns.
The Audit Committee Charter requires that the Audit Committee pre-approve
all audit and non-audit services to be provided by the auditors to the Fund, and
all non-audit services to be provided by the auditors to the Fund's investment
adviser and any service providers controlling, controlled by or under common
control with the Funds' investment adviser ("affiliates") that provide on-going
services to each Fund, if the engagement relates directly to the operations and
financial reporting of each Fund, or to establish detailed pre-approval policies
and procedures for such services in accordance with applicable laws. All of the
audit, audit-related and tax services described above for which KPMG billed the
Fund fees for the fiscal years ended November 30, 2004 and November 30, 2005
were pre-approved by the Audit Committee.
KPMG has informed the Fund that it has no direct or indirect financial
interest in the Fund. For the Fund's fiscal year ended November 30, 2005, KPMG
did not provide any non-audit services or bill any fees for such services to the
Funds' investment adviser or any affiliates thereof that provide services to the
Fund. The Horejsi Affiliates have engaged KPMG from time to time in the past to
provide various accounting, auditing and consulting services and currently
engages KPMG as a consultant with respect to ongoing tax related issues. For the
twelve months ended November 30, 2004, the Horejsi Affiliates paid $3,800 to
KPMG for their services. For the twelve months ended November 30, 2005, the
Horejsi Affiliates paid $0 to KPMG for their services. The Audit Committee has
considered and concluded that the provision of non-audit services is compatible
with maintaining the auditors' independence.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Section 16(a) of
the 1934 Act and Section 30(h) of the 1940 Act requires the Fund's Directors and
officers, persons affiliated with the Fund's investment advisers, and persons
who own more than 10% of a registered class of the Fund's securities, to file
reports of ownership and changes of ownership with the SEC and the New York
Stock Exchange. Directors, officers and greater-than-10% stockholders are
required by SEC regulations to furnish the Fund with copies of all Section 16(a)
forms they file. Based solely upon the Fund's review of the copies of such forms
it receives and written representations from such persons, the Fund believes
that through the date hereof all such filing requirements applicable to such
persons were complied with.
BROKER NON-VOTES AND ABSTENTIONS. An uninstructed proxy for shares held by
brokers or nominees as to which (i) instructions have not been received from the
beneficial owners or the persons entitled to vote and (ii) the broker or nominee
does not have discretionary voting power on a particular matter is a broker
"non-vote". Proxies that reflect abstentions or broker non-votes will be counted
as shares that are present and entitled to vote on the matter for purposes of
determining the presence of a quorum. Abstentions and broker non-votes will have
no effect on the result of the vote in the election of directors in Proposal 1.
Abstentions and broker non-votes will have the same effect as votes against
Proposal 2 and 3.
OTHER MATTERS TO COME BEFORE THE MEETING
The Fund does not intend to present any other business at the Meeting, nor
is it aware that any stockholder intends to do so. If, however, any other
matters are properly brought before the Meeting, the persons named in the
accompanying form of proxy will vote thereon in accordance with their
discretion.
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STOCKHOLDERS ARE REQUESTED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD OR
AUTHORIZE PROXIES VIA TELEPHONE OR THE INTERNET. THE PROXY CARD SHOULD BE
RETURNED IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE
UNITED STATES. INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES ARE SET FORTH ON
THE INSIDE COVER.
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INTENTIONALLY LEFT BLANK
PROXY
BOULDER TOTAL RETURN FUND, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned holder of shares of Common Stock of Boulder Total Return Fund,
Inc., a Maryland corporation (the "Fund"), hereby appoints Stephen C. Miller,
Carl D. Johns, and Jon-Luc Dupuy, or any of them, as proxies for the
undersigned, with full powers of substitution in each of them, to attend the
Annual Meeting of Stockholders (the "Annual Meeting") to be held at the
Scottsdale Plaza Resort, 7200 N. Scottsdale Road, Scottsdale, Arizona at 9:00
a.m. Mountain Standard Time (local time), on April 24, 2006, and any
adjournments or postponements thereof, to cast on behalf of the undersigned all
votes that the undersigned is entitled to cast at the Annual Meeting and to
otherwise represent the undersigned at the Annual Meeting with all the powers
possessed by the undersigned if personally present at the Meeting. The votes
entitled to be cast will be cast as instructed below. If this Proxy is executed
but no instruction is given, the votes entitled to be cast by the undersigned
will be cast "FOR" each of the nominees for Director and "FOR" each of the other
proposals described in the Proxy Statement. The undersigned hereby acknowledges
receipt of the Notice of Annual Meeting and Proxy Statement. In their
discretion, the proxies are authorized to vote upon such other business as may
properly come before the Meeting. A majority of the proxies present and acting
at the Annual Meeting in person or by substitute (or, if only one shall be so
present, then that one) shall have and may exercise all of the power and
authority of said proxies hereunder. The undersigned hereby revokes any proxy
previously given.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
Please indicate your vote by an "X" in the appropriate box below.
This proxy, if properly executed, will be voted in the manner directed by the
undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1, 2 AND 3.
Please refer to the Proxy Statement for a discussion of the Proposals.
------------ ------------------------------------------------------------- ----------- ----------------- -------------------------
Election of Directors: Nominees are Joel W. Looney, Dennis FOR____ WITHHOLD___ FOR ALL EXCEPT ___
1. R. Causier., and Dr. Dean L. Jacobson.
----------------------------------------------------------------------------------------------------------------------------------
Instruction: If you do not wish your shares voted "for" a particular nominee,
mark the "For All Except" box and strike a line through the name(s) of the
nominee(s). Your shares will be voted "For" the remaining nominee(s).
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" ELECTION OF ALL THE NOMINEES
----------------------------------------------------------------------------------------------------------------------------------
2. Amendments to the Fund's charter (the "Charter") which FOR___ AGAINST ___ ABSTAIN ___
will repeal in their entirety all of the currently
existing terms of the Fund's taxable auction market
preferred stock and substitute in lieu thereof the new
terms set forth in the Form of Articles of Amendment.
----------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS, UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THIS
PROPOSAL, AS MORE FULLY DESCRIBED IN THE PROXY STATEMENT
----------------------------------------------------------------------------------------------------------------------------------
3. An amendment to the Charter to provide that the number of FOR___ AGAINST ___ ABSTAIN ___
directors of the Fund shall be five, subject to the
provisions of any class or series of Preferred Stock.
----------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS, UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THIS
PROPOSAL, AS MORE FULLY DESCRIBED IN THE PROXY STATEMENT
----------------------------------------------------------------------------------------------------------------------------------
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT ____
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
NOTE: Please sign exactly as your name appears on this Proxy. If joint owners,
EACH should sign this Proxy. When signing as attorney, executor, administrator,
trustee, guardian or corporate officer, please give your full title.
Signature:
-------------------------
Date:
-------------------------
Signature:
-------------------------
Date:
-------------------------
[AMPS PROXY CARD]
PROXY
BOULDER TOTAL RETURN FUND, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned holder of shares of the Taxable Auction Market Preferred Stock
("AMPS") of Boulder Total Return Fund, Inc., a Maryland corporation (the
"Fund"), hereby appoints Stephen C. Miller, Carl D. Johns, and Jon-Luc Dupuy, or
any of them as proxies for the undersigned, with full powers of substitution in
each of them, to attend the Annual Meeting of Stockholders (the "Annual
Meeting") to be held at the Scottsdale Plaza Resort, 7200 N. Scottsdale Road,
Scottsdale, Arizona at 9:00 a.m. Mountain Standard Time (local time), on April
24, 2006, and any adjournments or postponements thereof, to cast on behalf of
the undersigned all votes that the undersigned is entitled to cast at the Annual
Meeting and to otherwise represent the undersigned at the Annual Meeting with
all the powers possessed by the undersigned if personally present at the
Meeting. The votes entitled to be cast will be cast as instructed below. If this
Proxy is executed but no instruction is given, the votes entitled to be cast by
the undersigned will be cast "FOR" each of the nominees for Director and "FOR"
each of the other proposals described in the Proxy Statement. The undersigned
hereby acknowledges receipt of the Notice of Annual Meeting and Proxy Statement.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting. A majority of the proxies present and
acting at the Annual Meeting in person or by substitute (or, if only one shall
be so present, then that one) shall have and may exercise all of the power and
authority of said proxies hereunder. The undersigned hereby revokes any proxy
previously given.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
Please indicate your vote by an "X" in the appropriate box below.
This proxy, if properly executed, will be voted in the manner directed by the
undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1, 2 AND 3.
Please refer to the Proxy Statement for a discussion of the Proposals.
------------ ------------------------------------------------------------- ----------- ----------------- -------------------------
1. Election of Directors: Nominees are Susan L. Ciciora and FOR____ WITHHOLD___ FOR ALL EXCEPT ___
Richard I. Barr.
----------------------------------------------------------------------------------------------------------------------------------
Instruction: If you do not wish your shares voted "for" a particular nominee,
mark the "For All Except" box and strike a line through the name(s) of the
nominee(s). Your shares will be voted "For" the remaining nominee(s).
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" ELECTION OF ALL THE NOMINEES
----------------------------------------------------------------------------------------------------------------------------------
2. Amendments to the Fund's charter (the "Charter") which FOR___ AGAINST ___ ABSTAIN ___
will repeal in their entirety all of the currently
existing terms of the Fund's taxable auction market
preferred stock and substitute in lieu thereof the new
terms set forth in the Form of Articles of Amendment.
----------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS, UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THIS
PROPOSAL, AS MORE FULLY DESCRIBED IN THE PROXY STATEMENT
----------------------------------------------------------------------------------------------------------------------------------
3. An amendment to the Charter to provide that the number of FOR___ AGAINST ___ ABSTAIN ___
directors of the Fund shall be five, subject to the
provisions of any class or series of Preferred Stock.
----------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS, UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THIS
PROPOSAL, AS MORE FULLY DESCRIBED IN THE PROXY STATEMENT
----------------------------------------------------------------------------------------------------------------------------------
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT ____
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
NOTE: Please sign exactly as your name appears on this Proxy. If joint owners,
EACH should sign this Proxy. When signing as attorney, executor, administrator,
trustee, guardian or corporate officer, please give your full title.
Signature:
-------------------------
Date:
-------------------------
Signature:
-------------------------
Date:
-------------------------