UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934. (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14a-6(e)(2))
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12
THE ZWEIG TOTAL RETURN FUND, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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ZWEIG CONSULTING LLC
April 26, 2004
Dear Zweig Total Return Fund Shareholder:
I wholeheartedly endorse the re-election of Alden C. Olson, Daniel T. Geraci and
R. Keith Walton as directors at the Fund's annual meeting being held on May
12th. The current directors of the Fund have the Fund headed in the right
direction and it is important that these outstanding directors be re-elected.
As you know a new portfolio management team was installed last year and I fully
support that decision. In addition, I have agreed to assume an expanded role in
reviewing the Fund's portfolio and will be actively collaborating in the stock
selection process with the new portfolio management team.
The Board's recent decision to adopt a 10% fixed distribution policy consisting
of 7% cash and 3% Fund stock on an annualized basis, a decision which I fully
support, has had a very positive impact in narrowing the discount on the Fund's
shares. The discount reached a low of 4.2% on April 8, 2004 after having been as
high as 14.05% on August 14, 2003. Most recently, the shares traded at a 6.9%
discount as of April 23, 2004. In my view, the Fund's discount would have been
significantly lower if not for an approximately 6.7% decline in the average
discount on closed-end bond funds over the past three weeks (from a 0.3% premium
to a 6.4% discount), resulting from the recent rise in interest rates.
When I launched The Zweig Total Return Fund almost sixteen years ago, I felt
that the Fund could best achieve its investment objective by being a closed-end
fund. I continue to feel this way.
For these reasons, I strongly affirm my support for maintaining the Fund as
closed-end. I urge you to reject any effort to open-end the Fund, and I urge you
to follow the Board's recommendations.
Sincerely,
/s/ Martin E. Zweig
Martin E. Zweig
President
900 THIRD AVENUE NEW YORK, NEW YORK 10022
SHAREHOLDER ALERT
PROTECT YOUR LONG-TERM INVESTMENT IN
THE ZWEIG TOTAL RETURN FUND - DO NOT VOTE FOR PROPOSALS
BY DISSIDENT SHAREHOLDERS
April 26, 2004
Dear Zweig Total Return Fund Shareholder:
I am writing to tell you about important new developments that you should
consider related to the Annual Meeting of Shareholders of The Zweig Total Return
Fund, Inc. (the "Fund") being held on Wednesday, May 12, 2004.
- ON APRIL 8, 2004, THE BOARD OF DIRECTORS APPROVED A NEW FIXED DISTRIBUTION
POLICY EQUAL TO 10% OF NET ASSET VALUE CONSISTING OF 7% CASH AND 3% OF FUND
STOCK ON AN ANNUALIZED BASIS. THIS POLICY REPLACED THE VARIABLE
DISTRIBUTION POLICY ANNOUNCED IN JULY 2003. THE FIRST DISTRIBUTION UNDER
THE NEW FIXED DISTRIBUTION POLICY IS SCHEDULED TO BE PAID ON JUNE 24, 2004
TO SHAREHOLDERS OF RECORD AS OF JUNE 11, 2004.
- Since the April 8th announcement, the discount of the market price of the
Fund's shares from the per share net asset value of the Fund has been
substantially reduced, reaching a low of 4.2%. Following the July 2003
policy change, the discount had averaged 11.2% with a high of 14.05% on
August 14, 2003. As of April 23, 2004, the discount was 6.9%.
- You should know that two dissident shareholders of the Fund have disclosed
their intention to nominate themselves and one other person as directors,
to solicit proxies to convert the Fund to an open-end investment fund and
to make a non-binding recommendation to change the Fund's distribution
policy. THESE SHAREHOLDERS ARE PROFESSIONAL DISSIDENTS WHO HAVE A HISTORY
OF PURCHASING SHARES IN CLOSED-END FUNDS AT A DISCOUNT AND TAKING ACTIVIST
POSITIONS IN ORDER TO CASH OUT, CAUSING LONG-TERM SHAREHOLDERS TO DEAL WITH
THE PROBLEMS THEY LEAVE BEHIND. These dissident proposals are self-serving,
disruptive and impede our efforts to increase shareholder value. They are
not in the best interests of shareholders, especially long-term
shareholders.
YOUR VOTE IS CRITICAL - PLEASE ACT TODAY!
PROTECT YOUR INVESTMENT BY SIGNING, DATING AND MAILING PROMPTLY THE
ENCLOSED WHITE PROXY CARD. IF YOU PREVIOUSLY RETURNED A WHITE PROXY CARD
AND OPPOSE THE DISSIDENTS' NON-BINDING RECOMMENDATION, YOU NEED NOT RETURN
THE ENCLOSED WHITE PROXY CARD. THE NAMED PROXIES WILL EXERCISE THE
DISCRETIONARY AUTHORITY GRANTED BY THE PROXY CARD TO VOTE
AGAINST THE DISSIDENTS' RECOMMENDATION TO
CHANGE THE DISTRIBUTION POLICY.
DO NOT RETURN THE GREEN PROXY CARD THAT THE DISSIDENTS MAY SEND YOU.
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SHAREHOLDERS WITH QUESTIONS OR REQUIRING ASSISTANCE MAY CALL
D.F. KING & CO. INC., WHICH IS ASSISTING THE FUND, TOLL-FREE AT 1-888-628-1041
OR OUR FUND SERVICE PROFESSIONALS TOLL-FREE AT 1-800-272-2700.
The Board opposes each of the three proposals by the dissident shareholders,
Phillip Goldstein and Arthur Lipson, which are:
DISSIDENT PROPOSAL #1 - ELECTION OF OPPOSING SLATE
OUR RESPONSE: VOTE FOR THE NOMINEES RECOMMENDED BY YOUR BOARD OF DIRECTORS
We urge you to reject the proposal by the dissident shareholders to elect
themselves and one other person as directors and to VOTE FOR Alden C. Olson,
Daniel T. Geraci and R. Keith Walton, the three director nominees recommended by
the independent Nominating Committee of the Board in our proxy statement dated
April 5, 2004. Background information on these nominees can be found on pages 7
through 9 of our April 5 proxy statement. Two of our nominees are independent
and the third nominee is the President of the Fund. Our director nominees were
chosen for their qualifications, expertise and broad leadership experience in
asset management, academic and other business industry sectors. We view this
diversity as especially critical to best represent our shareholders,
particularly in the changing fund environment.
Professor Alden C. Olson has served as a director of the Fund for the past eight
years. In addition to his outstanding experience as professor of financial
management and investments at Michigan State University, he has attained a
Chartered Financial Analyst designation with the Association for Investment
Management and Research, as do most portfolio managers. Moreover, his years of
experience as your director provide you with an individual who has a firm
understanding of the history of the Fund and its shareholders.
Daniel T. Geraci, President of the Fund, brings years of experience in the
mutual fund arena as a result of his experience at Fidelity Investments, where
he was head of the private wealth management business, and at Pioneer Investment
Management, USA, where he served as Chief Executive Officer of its North
American investment operations. He provides your Board with a management
representative upon whom the Board can rely to execute its decisions, and who
works closely with the Fund portfolio management team.
Our newest independent director, R. Keith Walton, is eminently qualified to be a
director of the Fund, taking into consideration his experience at the United
States Department of the Treasury as Deputy Chief of Staff and Chief of Staff to
the Under-Secretary for Enforcement and Chief Law Enforcement Official, his
private law practice in the finance sector, and his current position as
Corporate Secretary, Secretary of the Trustees and Counselor to the President of
Columbia University.
Investment and business experience, in addition to a combined board experience
of at least 200 years entailing over 20 boards, make our Board and nominees
better qualified to represent your interests.
The dissident shareholders, Messrs. Goldstein and Lipson, are managers of hedge
funds that own shares in the Fund, all of which have been acquired since July
2003. We do not believe they would adequately represent the interests of all
shareholders. Furthermore, the dissidents' third nominee does not appear to have
the relevant experience and qualifications to serve as a director of the Fund.
2
DISSIDENT PROPOSAL #2 - CONVERSION TO AN OPEN-END INVESTMENT FUND
OUR RESPONSE: VOTE AGAINST THE PROPOSAL TO CONVERT THE FUND TO AN OPEN-END
INVESTMENT FUND. We urge you to VOTE AGAINST the proposal to convert the Fund to
an open-end investment company. As more fuIly described in our proxy statement
dated April 5, 2004, the Board, including the five independent directors,
unanimously recommends against open-ending the Fund, which was designed as a
closed-end vehicle to generate returns over the long term. Open-ending the Fund
would enable the dissidents to seize short-term profits while disrupting the
operations of the Fund to the detriment of long-term shareholders.
DISSIDENT PROPOSAL #3 - NON-BINDING DISTRIBUTION POLICY RECOMMENDATION
OUR RESPONSE: REJECT THE RECOMMENDATION TO CHANGE THE FUND'S DISTRIBUTION
POLICY. We urge you to reject the dissident shareholders' non-binding
recommendation to reinstate the Fund's annual 10% cash distribution policy,
which was eliminated in 2003. The Board recently adopted a 10% fixed
distribution policy consisting of 7% cash and 3% Fund stock on an annualized
basis. In setting the new fixed distribution policy, the Board concluded that
a 10% policy that combines 7% cash and 3% Fund stock would deliver the best
value potential to shareholders. The Board also determined that it would not
be appropriate to reinstate the prior 10% fixed cash distribution policy after
consideration of a number of factors such as conditions in the capital markets
including current interest rates. You should know that under applicable law
and the Fund's Articles of Incorporation, any change in the Fund's
distribution policy can only be made by the Board. The Board believes that the
distribution policy adopted on April 8, 2004 will benefit all shareholders.
THE DISSIDENTS' SUGGESTION THAT ADVERSE TAX CONSEQUENCES COULD BE ELIMINATED
OR MINIMIZED IF THEIR RECOMMENDATION IS ADOPTED IS MISINFORMED AND CONTRARY TO
EXISTING TAX LAW. IN THAT REGARD, YOU SHOULD READ THE DISCUSSION BELOW UNDER
"WHY OUR NEW FUND DISTRIBUTION POLICY IS RIGHT FOR SHAREHOLDERS".
* * *
As you know, the Fund also installed a new portfolio management team on April 1,
2003, consisting of Carlton Neel and David Dickerson of Phoenix/Zweig Advisors
LLC. The Board has evaluated the qualifications of Mr. Neel and Mr. Dickerson,
considering their experience and performance in prior management activities. The
Board believes they are well-qualified and positioned to act in your best
interests.
Additionally, on March 2, 2004, the Board approved the continuation of the
advisory relationship with Phoenix/Zweig Advisors and the continuation of the
sub-advisory relationship with Zweig Consulting LLC. Under the continued
sub-advisory relationship, Dr. Martin E. Zweig, President and owner of the
sub-adviser, continues to provide asset allocation services and has assumed an
expanded role in reviewing the Fund's portfolio. Dr. Zweig now actively
collaborates in the Fund's stock selection process with the Phoenix/Zweig
portfolio management team. In the opinion of the Board, the Fund's current 7%
cash and 3% Fund stock distribution policy, together with the change in the
portfolio management team and Dr. Zweig's expanded role with that team, will
serve the best interests of Fund shareholders by growing and preserving your
Fund investment over the long term.
3
YOUR VOTE IS IMPORTANT
We urge all shareholders to reject all of the dissidents' proposals. The Board
strongly believes that the dissident proposals do not represent the best
interests of shareholders, especially long-term shareholders, and are intended
to benefit large, institutional investors who seek to make a short-term trading
profit. DO NOT RETURN THE GREEN PROXY CARD THAT THE DISSIDENT SHAREHOLDERS MAY
SEND YOU. IF YOU HAVE NOT ALREADY RETURNED THE WHITE PROXY CARD WE SENT YOU OR
HAVE PREVIOUSLY RETURNED THE DISSIDENTS' GREEN PROXY CARD, PLEASE SIGN, DATE AND
PROMPTLY MAIL THE ENCLOSED WHITE PROXY CARD IN THE POSTAGE-PAID ENVELOPE
PROVIDED.
IF YOU ALREADY RETURNED A WHITE PROXY CARD (WHICH DOES NOT INCLUDE THE
DISSIDENTS' NON-BINDING DISTRIBUTION POLICY RECOMMENDATION), YOU DO NOT NEED TO
DO ANYTHING FURTHER IF YOU SUPPORT YOUR BOARD'S RECOMMENDATION TO VOTE AGAINST
THE NON-BINDING RECOMMENDATION. BY RETURNING THAT CARD, YOU HAVE GIVEN THE
FUND'S DESIGNATED PROXY HOLDERS DISCRETION TO VOTE ON THE DISSIDENTS'
NON-BINDING RECOMMENDATION. If you wish to specify the manner in which your
shares are to be voted on the dissidents' non-binding distribution policy
recommendation, you should mark, sign, date and return the enclosed WHITE proxy
card.
IF YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE FIRM, BANK NOMINEE OR OTHER
INSTITUTION, only it can vote such shares. To ensure that your shares are voted,
you should contact the person responsible for your account.
IF YOU PROPERLY EXECUTE AND RETURN THE ENCLOSED WHITE PROXY CARD ON TIME, your
shares will be voted in accordance with the instructions marked by you as a
shareholder. Executed WHITE proxy cards that are unmarked will be voted: 1)
"for" the election of the Fund's slate of director nominees; 2) "against" the
proposal submitted for consideration pursuant to the Fund's Articles of
Incorporation to convert the Fund to an open-ended investment company and to
adopt amendments to the Fund's Articles of Incorporation to effectuate the
conversion; and 3) "against" the dissidents' non-binding recommendation to
change the Fund's distribution policy. A shareholder can revoke any proxy prior
to its use by appearing at the Meeting and voting in person, by giving written
notice of such revocation to the Secretary of the Fund, or by returning a
subsequently dated proxy.
WHY OUR NEW FUND DISTRIBUTION POLICY IS RIGHT FOR SHAREHOLDERS
As discussed above, the Board of Directors has approved a new fixed distribution
policy equal to 10% of net asset value consisting of 7% cash and 3% Fund stock
on an annualized basis. The Board's decision was reached after thoughtful
deliberation, and took into consideration shareholders' communications to us
about the prior change in the distribution policy. We believe the new policy
addresses shareholders' needs. The first distribution is scheduled to be paid on
June 24, 2004 to shareholders of record as of June 11, 2004.
As you know, the Board adopted a variable distribution policy in July 2003 to
address potential tax consequences regarding the taxation (at ordinary income
tax rates) of certain distributions. As explained in the letter sent to
shareholders at that time, dated July 25, 2003, shareholders would pay
additional taxes on distributions when a set of three conditions exist: 1) the
Fund has current year gains (current earnings and profits); 2) the Fund has
accumulated losses from prior years (capital loss carryovers); and 3) the Fund
pays out distributions that exceed "required distributions." As of December 31,
2003, the Fund's capital loss carryover was approximately $51,300,000.
In July 2003, the Board concluded that as equities markets show signs of
recovery, Fund performance improves and the Fund realizes capital gains,
conditions 1 and 2 would likely be met. Under those circumstances, based upon a
fixed distribution policy, those excess distributions generally would be treated
as taxable distributions subject to ordinary income tax rates. In making its
July 2003 decision, the Board thoroughly considered at that time the Fund's
developing situation
4
and believed it to be in the best interests of shareholders to modify the 10%
fixed distribution policy in order to minimize the tax impact to shareholders.
At that time, the Fund's market price was at a premium to net asset value.
Since the 2003 change in policy, the market price of the Fund's shares has
reflected a persistent discount to net asset value. The Board has closely
monitored this situation and considered various actions to address this
discount. As part of its deliberations, the Board reviewed historical patterns
of other closed-end funds, including those with and without fixed distribution
policies; the distribution amounts paid by such policies; and the ultimate
shareholder value that would be derived taking into consideration possible taxes
due on such distributions and higher market prices for fund shares. The Board
determined that a 10% policy that combines 7% cash and 3% Fund stock would
likely enhance the value of the Fund's shares. While the potential tax impact
for shareholders under the new distribution policy remains, the Board believes
that regular fixed monthly distributions will serve the best interests of Fund
shareholders over the long term.
The new 7% cash distribution may be subject to taxes as was the case with past
distributions. The 3% Fund stock component of the distribution will not be
subject to tax upon receipt. However, sale of the shares you receive as a
distribution could be subject to tax depending on your personal financial
situation. As always, you should consult with your financial advisor or tax
professional. If the dissidents' recommendation for a change in distribution
policy were adopted by the Board, the additional cash distributions would
generally be treated as taxable distributions subject to ordinary income tax
rates and shareholders would lose benefits attributable to the capital loss
carryover.
IF YOU HAVE QUESTIONS ABOUT THE NEW DISTRIBUTION POLICY OR THE PROXY, CALL OUR
FUND SERVICE PROFESSIONALS TOLL-FREE AT 1-800-272-2700. IF YOU HAVE QUESTIONS
ABOUT THE PROXY, YOU CAN ALSO CALL D.F. KING & CO. INC., WHICH IS ASSISTING YOUR
FUND, TOLL-FREE AT 1-888-628-1041. YOU MAY RECEIVE A PHONE CALL FROM D.F. KING
REMINDING YOU TO VOTE OUR PROXY.
We are attaching as Appendix A certain additional information relating to the
solicitation. This information is required by the federal securities laws. You
should know that the dissidents have chosen not to supply such information to
you even though they are also required to do so under the federal securities
laws.
On behalf of your Board, thank you for your continued interest and support and
prompt return of the enclosed WHITE proxy card. Please know that we are
committed to acting in the interests of all Fund shareholders.
Sincerely,
/s/ Daniel T. Geraci
Daniel T. Geraci
President, The Zweig Total Return Fund, Inc.
5
APPENDIX A
The following table sets forth the names, principal occupations, business
addresses and the number of shares of the common stock of The Zweig Total Return
Fund, Inc. (the "Fund") beneficially owned by the directors of the Fund and such
other officers and employees, and associates of such directors, officers and
employees, as may be deemed participants in this proxy solicitation under the
federal securities laws (together the "Participants"). Except as set forth
below, no other securities in the Fund are held by any of the Participants.
NAME, OCCUPATION AND ADDRESS SHARES OWNED
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Charles H. Brunie (Independent Director) 80,090(1)
Chairman
Brunie Associates
600 Third Avenue
17th Floor
New York, NY 10016
Wendy Luscombe (Independent Director) 1,440
Principal
WKL Associates, Inc.
480 Churchtown Road
Craryville, NY 12521
Professor Alden C. Olson (Independent Director) 2,000
Retired, Michigan State University
2711 Ramparte Path
Holt, MI 48842
James B. Rogers, Jr. (Independent Director) 1,563
Chairman
Beeland Interests, Inc.
352 Riverside Drive
New York, NY 10025
R. Keith Walton (Independent Director) 100
Secretary of the University at Columbia University
Office of the Secretary of the University
Columbia University
535 West 116th Street
211 Low Memorial Library
New York, NY 10027
Daniel T. Geraci (Interested Director) 1,900
The Zweig Fund, Inc., President
The Zweig Total Return Fund, Inc., President
The Phoenix Companies, Inc., Executive Vice
President - Asset Management
Phoenix Investment Partners, Ltd., President
and Chief Executive Officer
900 Third Avenue
New York, NY 10022
Dr. Martin E. Zweig 136,099
Zweig Consulting LLC, President
900 Third Avenue
New York, NY 10022
Total 223,192
=======
(1) The number of shares owned by Mr. Brunie does not reflect any shares issued
to Mr. Brunie pursuant to the Fund's Automatic Reinvestment and Cash
Purchase Plan in calendar year 2004.
A-1
None of the Participants has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) during the past ten
years. No Participant owns any shares of common stock of record but not
beneficially. No Participant owns any securities of any subsidiary of the Fund.
During the past two years, none of the Participants has borrowed or
otherwise obtained funds for the purpose of acquiring or holding any securities
of the Fund.
None of the Participants has any substantial direct or indirect interest in
any matters to be acted upon at the Meeting, other than the directors who have
been re-nominated for election to the Board or as may be described below.
During the past two years, the Participants listed above effected the
following purchases and sales of the Fund's common stock: (i) Ms. Luscombe
purchased 400 shares on April 12, 2004 at $5.44 per share; (ii) Mr. Walton
purchased 100 shares on April 14, 2004 at $5.33 per share, and (iii) Mr. Geraci
purchased 1,900 shares on April 16, 2004 at $5.27 per share.
The Fund does not have any incentive plans.
Other than as discussed above, no Participant is, or was within the past
year, a party to any contract, arrangement or understanding with any person with
respect to any securities of the Fund.
No securities are owned by "associates" of any of the Participants as such
term is used under Regulation 14A.
Except as disclosed below, none of the Participants or any of such
Participant's associates has any arrangement or understanding with respect to
any future employment by the Fund or any future transactions to which the Fund
will or may be a party, nor any material interest, direct or indirect, in any
transaction which has occurred since December 31, 2003 or any currently proposed
transaction, or series of similar transactions, to which the Fund or any of its
subsidiaries was or is to be a party and in which the amount involved exceeds
$60,000.
Phoenix/Zweig Advisers LLC ("PZA"), for which Mr. Geraci serves as
President, is the investment advisor to the Fund pursuant to an Investment
Advisory Agreement, the current term of which ends on March 1, 2005 and is
subject to continuation annually by vote of the Board of Directors. For its
services for the year ended December 31, 2003 and for the quarter ended March
31, 2004, the Fund paid PZA $3,650,911 and $919,331, respectively.
Phoenix Equity Planning Corporation ("PEPCO"), for which Mr. Geraci serves
as Chairman of the Board and Chief Sales and Marketing Officer, is the
administrator to the Fund pursuant to an Administration Agreement, the current
term of which ends on March 1, 2005 and is subject to continuation annually by
vote of the Board of Directors. For its services for the year ended December 31,
2003 and for the quarter ended March 31, 2004, the Fund paid PEPCO $678,026 and
170,733, respectively.
Zweig Consulting LLC ("Zweig Consulting"), for which Dr. Zweig serves as
President, is the investment sub-adviser to the Fund and The Zweig Fund, Inc.
pursuant to the Amended and Restated Servicing Agreement, the current term of
which expires March 2, 2007, and is subject to continuation annually by vote of
the Board of the Directors. Zweig Consulting, pursuant to the above agreement,
is paid by PZA, the Fund's and The Zweig Fund, Inc.'s adviser, and not by the
Fund. For its services for the year ended December 31, 2003 and the quarter
ended March 31, 2004 PZA paid Zweig Consulting $1,500,000 and $500,000
respectively.
Future payments for services to the Fund by PZA, PEPCO and Zweig Consulting
will be made under the terms of the respective agreements.
The Fund has retained D.F. King & Co., Inc., 48 Wall Street, New York, NY
10005, (212) 269-5550, to assist in the solicitation of proxies and for related
services. The Fund expects to pay D.F. King & Co., Inc. a fee of up to $50,000
and reimburse it for its reasonable out-of-pocket expenses. In addition, the
Fund expects to indemnify D.F. King & Co., Inc. against certain liabilities and
expenses, including liabilities and expenses under the federal securities laws.
A-2
THE ZWEIG TOTAL RETURN FUND, INC.
ANNUAL MEETING OF SHAREHOLDERS
MAY 12, 2004
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
The undersigned shareholder of The Zweig Total Return Fund, Inc., a
Maryland corporation (the "Fund"), hereby appoints DANIEL T. GERACI and CARLTON
NEEL, and each of them, with full power of substitution and revocation, as
proxies to represent the undersigned at the Annual Meeting of Shareholders of
the Fund to be held at 11:30 A.M. at the offices of Katten Muchin Zavis
Rosenman, located at 575 Madison Avenue (between 56th and 57th Streets), 11th
Floor, New York, New York, at any and all adjournments thereof, and to vote at
the Annual Meeting all shares of the Fund which the undersigned would be
entitled to vote, with all powers the undersigned would possess if personally
present in accordance with the instructions on the reverse side of this proxy.
WHEN THIS PROXY IS PROPERLY EXECUTED, THE SHARES REPRESENTED HEREBY WILL BE
VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR
THE ELECTION OF ALL NOMINEES AS DIRECTORS (PROPOSAL 1), AGAINST THE ADOPTION OF
THE PROPOSAL TO CONVERT THE FUND TO AN OPEN-END INVESTMENT COMPANY (PROPOSAL 2),
AGAINST THE ADOPTION OF THE NON-BINDING RECOMMENDATION TO REINSTATE THE FUND'S
ANNUAL 10% CASH DISTRIBUTION POLICY (PROPOSAL 3), AND IN THE DISCRETION OF THE
PROXIES WITH RESPECT TO ALL OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE
MEETING AND ANY ADJOURNMENTS THEREOF. THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF
THE ACCOMPANYING NOTICE OF ANNUAL MEETING AND PROXY STATEMENT.
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SEE REVERSE SEE REVERSE
SIDE (CONTINUED, AND TO BE SIGNED AND DATED ON THE REVERSE SIDE.) SIDE
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/X/ PLEASE MARK
VOTES AS IN THIS
EXAMPLE.
1. Election of Directors. The Board recommends a Vote Against Proposal 2
NOMINEES: (01) R. Keith Walton
(02) Alden C. Olson 2. With respect to the proposal (Proposal 2) pursuant to the
(03) Daniel T. Geraci Fund's Articles of Incorporation to convert the Fund to an
open-end investment company and to adopt an amendment and
WITHHELD restatement of the Articles of Incorporation to effectuate
FOR ALL FROM ALL the proposal.
NOMINEES / / / / NOMINEES
/ / FOR / / AGAINST / / ABSTAIN
The Board recommends a Vote Against Proposal 3
3. With respect to the non-binding recommendation to reinstate
the Fund's annual 10% cash distribution policy which was
eliminated in 2003.
/ / FOR / / AGAINST / / ABSTAIN
4. In their discretion, on such other matters as may properly
come before the meeting and any adjournments thereof.
/ /
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For all nominee(s) except as written
above
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
Please sign exactly as name or names appear on this proxy.
If stock is held jointly, each holder should sign. If
signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give full
title.
Sign, Date and Return the Proxy Card Promptly Using
the Enclosed Envelope.
Signature: Date: Signature: Date:
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