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-11(c) or Sec. 240.14a-12
BOULDER GROWTH & INCOME 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)(4) 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:
BOULDER GROWTH & INCOME FUND, INC.
1680 38TH STREET, SUITE 800
BOULDER, COLORADO 80301
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on April 22, 2003
To the Shareholders:
Notice is hereby given that the Annual Meeting of Shareholders of Boulder
Growth & Income Fund, Inc. (the "Fund"), a Maryland corporation, will be held at
the Doubletree La Posada Resort, 4949 E. Lincoln Dr., Scottsdale, Arizona at
10:00 a.m. Mountain Standard Time, on April 22, 2003, for the following
purposes:
1. To elect two (2) Directors of the Fund (Proposal 1).
2. To approve the elimination of the Fund's fundamental investment
restriction regarding short sales (Proposal 2).
3. To approve an amendment to the Fund's fundamental investment restriction
regarding industry concentration (Proposal 3).
4. To transact such other business as may properly come before the Meeting
or any adjournments thereof.
The Board of Directors of the Fund has fixed the close of business on
February 28, 2003 as the record date for the determination of shareholders of
the Fund entitled to notice of and to vote at the Annual Meeting.
By Order of the Board of Directors,
/s/ Stephanie Kelley
STEPHANIE KELLEY
Secretary
March 11, 2003
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To enable shareholders to vote in the most prompt and convenient manner possible
we have provided four ways to vote:
By Internet
By Toll-Free Telephone
By completing and mailing your proxy card
By written ballot at the meeting
If you wish to vote by phone or internet please refer to the instructions
attached to the enclosed proxy card or voting form. The process of voting by
phone or internet will assist the Fund in limiting costs associated with this
solicitation and also save time for shareholders voting their shares.
Shareholders who do not expect to attend the annual meeting and who do not vote
by phone or internet are requested to complete, sign and date the enclosed proxy
card. The proxy card should be returned in the enclosed envelope, which needs no
postage if mailed in the continental United States. Instructions for the proper
execution of proxies are set forth on the inside cover.
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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
BOULDER GROWTH & INCOME FUND, INC.
1680 38TH STREET, SUITE 800
BOULDER, COLORADO 80301
ANNUAL MEETING OF SHAREHOLDERS
April 22, 2003
PROXY STATEMENT
This proxy statement ("Proxy Statement") for Boulder Growth & Income
Fund, Inc. ("BIF" 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
Shareholders of the Fund to be held on Tuesday April 22, 2003, at 10:00 a.m.
Mountain Standard Time, at the Doubletree La Posada Resort, 4949 E. Lincoln Dr.,
Scottsdale, Arizona, and at any adjournments thereof (the "Meeting"). A Notice
of Annual Meeting of Shareholders and proxy card for the Fund accompany this
Proxy Statement. Proxy solicitations will be made, beginning on or about March
11, 2003, primarily by mail, but proxy solicitations may also be made by
telephone, by Internet on the Fund's web site, telegraph or personal interviews
conducted by officers of the Fund, Mellon Investor Services, the transfer agent
of the Fund, and by PFPC, Inc., the Fund's sub-administrator. The costs 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.
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 administrator to the Fund and is
located at 1680 38th Street, Suite 800, Boulder, Colorado 80301.
The Annual Report of the Fund, including audited financial statements
for the fiscal period ended November 30, 2002, has been mailed to shareholders.
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.
If the enclosed proxy is properly executed and returned by April 22,
2003 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 Director and FOR the other matters
listed in the accompanying Notice of the Annual Meeting of Shareholders and FOR
any other matters that may properly come before the Meeting and that are deemed
appropriate. Any shareholder who has given a proxy has the right to revoke it at
any time prior to its exercise either by attending the Meeting and voting his or
her Shares in person or by submitting a letter of revocation or a later-dated
proxy to the Fund at the above address prior to the date of the Meeting.
A quorum of the Fund's shareholders is required to properly conduct the
business of the Meeting. A quorum is constituted by the presence in person or by
proxy of the holders of a majority of the outstanding shares of the Fund
entitled to vote at the Meeting. 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 any of the proposals are not received, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further solicitation
of proxies. Any such adjournment will require the affirmative vote of a majority
of those shares represented at the Meeting in person or by proxy. 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. A shareholder vote may be taken on one or more of the proposals in
the Proxy Statement prior to any such adjournment if sufficient votes have been
received for approval.
The Fund has one class of capital stock: common stock, par value $0.01
per share (the "Common Stock" or the "Shares"). On the record date, February 28,
2003, there were 11,327,784 Shares of the Fund issued and outstanding. Each
Share is entitled to one vote at the Meeting and fractional shares are entitled
to proportionate shares of one vote.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. The following table
sets forth certain information regarding the beneficial ownership of the Fund's
shares as of February 28, 2003 by each person who may be deemed by the Fund to
beneficially own 5% or more of the Fund's Common Stock.
Name of Owner* Number of Shares Number of Shares Percentage
Directly Owned Beneficially Owned Beneficially Owned
------------------------------------- ------------------ ---------------------- -----------------------
------------------------------------- ------------------ ---------------------- -----------------------
Ernest Horejsi Trust No. 1B 2,467,800 2,467,800 21.79%
Badlands Trust Company --- ---** 21.79%
Stewart R. Horejsi Trust No. 2 --- ---** 21.79%
Aggregate Shares Owned** 2,467,800 2,467,800 21.79%
* The address of each listed owner is c/o Badlands Trust Company, POB 801, 614
Broadway, Yankton, South Dakota 57078.
** Excludes shares owned by the Ernest Horejsi Trust No. 1B (the "EH Trust").
Badlands Trust Company ("Badlands") is one of three trustees of the EH Trust.
Badlands is a trust company organized under the laws of South Dakota and is
wholly owned by the Stewart R. Horejsi Trust No. 2, an irrevocable trust
organized by Stewart R. Horejsi for the benefit of his issue. The directors of
Badlands are Larry Dunlap, Stephen C. Miller, Robert Ciciora, who is the brother
of Mr. Horejsi's son-in-law (John Ciciora), Gail G. Gubbels and Marty Jans.
Badlands and its directors disclaim beneficial ownership of shares owned by the
EH Trust. Together with Larry Dunlap and Badlands, Ms. Ciciora is a trustee of
the EH Trust and also one of the beneficiaries of the EH Trust. Mr. Miller is an
officer and director of Badlands. Because two of the Trust's trustees are
required in order for the Trust to vote or exercise dispositive authority with
respect to shares owned by the Trust, Ms. Ciciora and Mr. Miller each disclaim
beneficial ownership of such shares.
----------------------------
The EH Trust, Badlands and the Stewart R. Horejsi Trust No. 2, as well as other
Horejsi affiliated trusts and entities are collectively referred to herein as
the "Horejsi Affiliates". 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 February 28, 2003, Cede & Co., a nominee partnership of the
Depository Trust Company, held of record, but not beneficially, 10,206,461
shares or 90.1% of Common Stock outstanding of the Fund.
As of February 28, 2003, the executive officers and directors of the
Fund, as a group, owned 2,506,870 Common Shares (this amount includes the
aggregate shares of Common Stock owned by the Horejsi Affiliates set forth
above), representing 22.13% of Common Shares.
In order that your Shares may be represented at the Meeting, you are
requested to vote on the following matters:
PROPOSAL NO. 1: ELECTION OF DIRECTORS
The Board is divided into three classes, each class having a term of
three years. Each year the term of one class will expire and the successor or
successors elected to such class will serve for a three year term. The first
proposal to be considered at the Meeting is the election of two (2) Directors of
the Fund as follows:
Susan L. Ciciora and Joel W. Looney, Class II Directors of the
Fund, have been nominated for a single three year term which will
expire at the Fund's 2006 Annual Meeting of Shareholders or until
their successors are duly elected and qualified.
Alfred G. Aldridge, Jr. and Richard I. Barr, Class III Directors of the Fund,
were elected on January 23, 2002, for a term to expire at the Fund's 2004 Annual
Meeting of Shareholders or until their successors are duly elected and
qualified. Stephen C. Miller, Class I Director of the Fund, was elected on
October 1, 2002, for a term to expire at the Fund's 2005 Annual Meeting of
Shareholders or until his successor is duly elected and qualified. The nominees
have consented to serve as Directors if elected at the Meeting. 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.
INFORMATION ABOUT DIRECTORS AND OFFICERS. Set forth in the following
table is information about the nominees for election to the Board and the
existing Directors of the Fund.
------------------------------ ------------------------ ---------------------------------------------- ------------------
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 Complex
of Office Overseen by
Director
------------------------------ ------------------------ ---------------------------------------------- ------------------
Independent Directors
------------------------------ ------------------------ ---------------------------------------------- ------------------
Alfred G. Aldridge, Jr. Director of the Fund Retired; from 1982-2002, Sales Manager of 2
Brig. Gen. (Retired) since January 2002. Shamrock Foods Company; Director of the
Cal. Air National Guard Current term expires Fiesta Bowl, Tempe, AZ since 1997;
Age: 65 at the 2004 annual Director, Boulder Total Return Fund, Inc.,
meeting since 1999.
Richard I. Barr Director of the Fund Retired; from 1963-2001, Manager of 2
Age: 64 since January 2002. Advantage Sales and Marketing, Inc;
Current term expires Director, Boulder Total Return Fund, Inc.,
at the 2004 annual since 1999; Director, First Financial Fund,
meeting Inc., since 2001.
Joel W. Looney Director of the Fund Partner, Financial Management Group, LLC 2
Age: 40 since January, 2002. since July 1999; CFO, Bethany College from
Current Nominee for 1995 -1999; Director, Boulder Total Return
Director for a term to Fund, Inc., since January 2001.
expire at the 2006
annual meeting
Interested Directors**
Susan L. Ciciora Director of the Fund Owner, Superior Interiors (interior design 2
Age: 39 since January 2002. for custom homes) since 1995; Corporate
Current Nominee for Secretary, Ciciora Custom Builders,
a term to expire LLC Director since 1995; Trustee of the Brown
at the 2006 Trust and the EH Trust; Director, Boulder Total
annual meeting Return Fund, Inc., since November 2001.
Stephen C. Miller Director and Chairman President of and General Counsel for Boulder 2
Age: 50 of the Board since Investment Advisers, LLC; Manager, Fund
January 2002. Administrative Services, LLC ("FAS"); Vice
President of the President of Stewart Investment Advisers;
Fund. Current term Director, Chairman of the Board and
expires at the 2005 President of Boulder Total Return Fund,
annual meeting Inc., since 1999; 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.
* Unless otherwise specified, the Directors' respective addresses are c/o
Boulder Growth & Income Fund, Inc., 1680 38th Street, Suite 800, Boulder,
Colorado 80301.
** Mr. Miller is an "interested person" because he is an officer of BIA and SIA,
the Fund's investment advisers. 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.
----------------------------
From the late 1980's until January, 2001, Mr. Looney had 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 (other than Mr. Miller,
who is described above) are listed in the table below. Each officer was elected
to office by the Board at a meeting held on January 23, 2002. This table also
shows certain additional information. 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
------------------------------ -------------------------- ----------------------------------------------------------
------------------------------ -------------------------- ----------------------------------------------------------
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 Total Return Fund, Inc., since 1999; Employee of
Age: 40 January 2002. Appointed Flaherty & Crumrine Incorporated prior to December 31,
annually. 1998; Assistant Treasurer of Preferred Income Management Fund
Incorporated, Preferred Income Fund Incorporated and
Preferred Income Opportunity Fund Incorporated prior to
December 31, 1998.
Stephanie Kelley Secretary since January Secretary, Boulder Total Return Fund, Inc., since
1680 38th Street, 2002. Appointed October 27, 2000; Assistant Secretary and Assistant
Suite 800 annually. Treasurer of various Horejsi Affiliates; employee of FAS
Boulder, CO 80301 since March 1999.
Age: 46
Set forth in the following table are the nominees for election to the
Board as well as the other Directors of the Fund, together with the dollar range
of equity securities beneficially owned by each Director or nominee in the Fund
as of February 28, 2003, as well as the aggregate dollar range of equity
securities in all funds overseen in a family of investment companies (i.e.,
funds managed by 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
Alfred G. Aldridge, Jr. Under $10,000 $10,001 to $50,000
Richard I. Barr $10,001 to $50,000 Over $100,000
Joel W. Looney $10,001 to $50,000 $10,001 to $50,000
Interested Directors and Nominees
-------------------------------------- -------------------------------- ---------------------------------
Susan L. Ciciora Over $100,000+ Over $100,000
Stephen C. Miller Over $100,000++ Over $100,000
+ 2,467,800 Shares of the Fund are held by the EH Trust. 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 9,000 shares
of the Fund.
++ Mr. Miller indirectly owns and controls 7,600 shares of the Fund through his membership in Erma Miller, LLC. Mr. Miller is
also a director and officer of Badlands Trust Company. By virtue of such relationships, Mr. Miller may be deemed to share the
indirect power to vote and direct the disposition of the Shares directly and beneficially held by EH Trust and Badlands Trust
Company. Mr. Miller disclaims beneficial ownership of such Shares.
----------------------------
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 COMPENSATION
The following table sets forth certain information regarding the
compensation of the Fund's Directors for the fiscal period ended November 30,
2002* and the fiscal year ended June 30, 2002. 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.
Directors receive reimbursement for travel and other out of pocket expenses
incurred in connection with Board meetings.
Total
Aggregate Compensation Total
Compensation from the Fund Aggregate Compensation
from the Fund and Fund Complex Compensation from the Fund
Name of Person and Position with the Paid to Paid to from the Fund and Fund
Fund Directors for Directors for Paid to Complex Paid to
five month five month Directors for Directors for
fiscal period fiscal period fiscal year fiscal year
ended 11/30/02 ended 11/30/02 ended 6/30/02 ended 6/30/02
-------------------------------------- ------------------ ------------------ ------------------- ------------------
Alfred G. Aldridge, Jr., Director $7,500 $ 18,500 $6,000 $29,500
(2 funds) (2 funds)
Richard I. Barr, Director $7,000 $ 18,000 $6,000 $29,500
(2 funds) (2 funds)
Joel W. Looney, Director $7,500 $ 18,500 $6,000 $29,500
(2 funds) (2 funds)
Susan L. Ciciora, Director $0 $0 $0 $0
$0 $0 $0 $0
Stephen C. Miller, President of the
Fund, Chairman of the Board and
Director
Prior to January 28, 2002, each Director of the Fund who was not an
officer of the Fund received a fee of $2,000 per annum plus $1,000 for each
in-person meeting, and $250 for each telephone meeting. In addition, the Audit
Committee and Nominating Committee members received an additional $250 for each
committee meeting attended. Committee chairs received an additional $375 for
each committee meeting chaired.
Since January 28, 2002, each Director of the Fund who is not a
Director, officer or employee of one of the Advisers, or any of their
affiliates, receives a fee of $3,000 for each in-person meeting, and $500 for
each telephone meeting, constituting their full compensation. Each Director of
the Fund is reimbursed for travel and out-of-pocket expenses associated with
attending Board and Committee meetings. The Board held seven meetings (three of
which were held by telephone conference call) during the fiscal year ended June
30, 2002. The Board held five meetings (three of which were held by telephone
conference call) during the five month fiscal period ended November 30, 2002.
Each Director currently serving in such capacity attended at least 75% of the
meetings of Directors and any Committee of which he is a member. The aggregate
remuneration paid to the Directors of the Fund for acting as such during the
fiscal year ended June 30, 2002 amounted to $49,706.1 The aggregate remuneration
paid to the Directors of the Fund for acting as such during the five month
fiscal period ended November 30, 2002 amounted to $22,000.
COMMITTEES OF THE BOARD OF DIRECTORS
AUDIT COMMITTEE; REPORT OF AUDIT COMMITTEE. 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 adopted a written
charter for the Audit Committee on January 23, 2002. A copy of the Audit
Committee Charter was incorporated in the proxy statement filed for the
shareholder meeting held October 1, 2002. The Audit Committee met three times
during the fiscal year ended June 30, 2002 and two times (one of which was held
by telephone conference call) during the fiscal period ended November 30, 2002.
In connection with the audited financial statements as of and for the
period ended November 30, 2002 included in the Fund's Annual Report for the
period ended November 30, 2002 (the "Annual Report"), at a meeting held on
January 21, 2003, 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 members of the Audit Committee are not professionally engaged in
the practice of auditing or accounting and are not employed by the Fund for
accounting, financial management or internal control. 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 shareholders
and filed with the SEC.
Submitted by the Audit Committee of the Fund's Board of Directors:
Alfred G. Aldridge, Jr.
Richard I. Barr
Joel W. Looney
INDEPENDENT ACCOUNTANTS. On January 21, 2003, the Audit Committee of
the Board, consisting of those Directors who are not "interested persons" (as
defined in the 1940 Act) selected KPMG LLP ("KPMG"), 99 High Street, Boston,
Massachusetts 02110-2371, as independent accountants for the Fund for the Fund's
fiscal year ending November 30, 2003. The selection of KPMG was ratified by the
entire Board. KPMG also served as independent accountants for the Fund for the
Fund's fiscal year ending June 30, 2002 and the fiscal period ending November
30, 2002. 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.
KPMG has informed the Fund that it has no direct or indirect financial
interest in the Fund. The Horejsi Affiliates have engaged KPMG from time to time
in the past to provide various accounting, auditing and consulting services.
Ernst & Young LLP ("Ernst & Young"), 1221 McKinney Street, Suite 2400,
Houston, Texas, 77010 served as independent accountants for the Fund from April
18, 2000 until January 23, 2002. Ernst & Young resigned as independent
accountant effective as of January 23, 2002. Ernst & Young's reports on the
financial statements for the two years immediately preceding their resignation
contained no adverse opinion or disclaimer of opinion and was not qualified or
modified as to uncertainty, audit scope, or accounting principles. During the
two fiscal years immediately preceding Ernst & Young's resignation, there were
no disagreements with such accountants on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure.
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 year
ended June 30, 2002 and fiscal period ended November 30, 2002. For the 12 months
ended June 30, 2002, the Horejsi Affiliates paid $0 to KPMG for their services.
For the five months ended November 30, 2002, the Horejsi Affiliates paid $0 to
KPMG for their services.
Financial Information Systems Design and
Audit Fees Implementation Fees All Other Fees
12 months ending 6/30/02 $19,000 $ 0 $ 0
5 months ending 11/30/02 $15,000 $ 0 $ 0
The Audit Committee has considered and concluded that the provision of
non-audit services is compatible with maintaining the auditors' independence.
The Audit Committee is composed entirely of the Fund's independent Directors,
consisting of Messrs. Aldridge, Barr and Looney.
NOMINATING COMMITTEE. The Board has a Nominating Committee consisting
of Messrs. Looney, Aldridge and Barr which is responsible for considering
candidates for election to the Board in the event a position is vacated or
created. The Nominating Committee would consider recommendations by shareholders
if a vacancy were to exist. Such recommendations should be forwarded to the
Secretary of the Fund. The Nominating Committee of the Fund did not meet during
the fiscal year ended June 30, 2002 or the fiscal period ended November 30,
2002. The Fund does not have a compensation committee.
REQUIRED VOTE. Election of Ms. Ciciora and Mr. Looney as Directors of the
Fund will require the affirmative vote of a plurality of the votes of Common
Stock cast at the Meeting in person or by proxy on Proposal 1.
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE NON-INTERESTED DIRECTORS,
RECOMMENDS THAT THE COMMON STOCK SHAREHOLDERS VOTE "FOR" THE ELECTION OF MS.
CICIORA AND MR. LOONEY.
PROPOSAL NO. 2 : TO APPROVE THE ELIMINATION OF THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION REGARDING SHORT SALES
BACKGROUND AND SUMMARY OF PROPOSAL. The Board of Directors recommends
that shareholders approve the deletion of the Fund's fundamental investment
restriction regarding short sales. Currently, one of the Fund's investment
restrictions provides that the Fund may not:
Make short sales of securities or purchase any securities on margin,
except for such short-term credits as are necessary for the clearance
of transactions.
Proposal No. 2 would eliminate this restriction.
REASONS FOR PROPOSAL. Management believes that the ability to engage in
short-selling could potentially have a beneficial effect on shareholders' total
return. Short-selling is the process of "borrowing" a security, and selling it
without currently owning it. In a short sale, the seller has the obligation to
return the identical security sold. The seller does not immediately deliver the
securities sold and is said to have a short position in those securities until
the delivery occurs. The idea underlying short-selling is that at some point in
the future the price of the security will go down and the short-seller will buy
back the security at the lower price, thus profiting from the transaction to the
extent of the difference between the proceeds from the short sale and the price
of the security on the day the Fund purchases the security to replace that
borrowed, plus transaction costs. Once the security is bought back, the
"borrowed" security can be returned. Short-selling is similar to the more
traditional notion of "buying low and selling high", although the order in which
the transactions occur is reversed (i.e., you "sell high and buy low"). The type
of short-selling described above is often referred to as a "naked short", named
to illustrate the position a short-seller puts himself in (i.e., the potential
for unlimited losses since the price of the security sold short can rise without
limit). In contrast, when a traditional investor "goes long" or "purchases" a
stock, exposure is limited to the amount of money invested - no more. The
Advisers do not expect to engage in taking "naked short" positions.
The Advisers also do not expect to take short positions as a normal
course of investing techniques, but will typically only use shorting techniques
as described in "Arbitrage Transactions" below.
Shorting Against the Box. Other types of short-selling do not involve
the unlimited risks described above. A short sale "against the box" occurs when
an investor holds a position long, and decides to simultaneously short the
stock, without selling his own stock. Such a method puts an investor in a
neutral position. That is, by being long and shorting a stock at the same time,
it doesn't matter which direction the price of the stock goes, the investor will
neither profit nor lose, except for the impact of transaction costs. This
methodology is used in circumstances where an investor wants to lock in sale
price of a security he does not wish to sell immediately or where an investor
wants to hedge against an anticipated decline in the price of a security held.
Arbitrage Transactions. Short-selling may also be used in an
"arbitrage" trade. Arbitrage is an investment strategy whereby a person attempts
to "lock in" a sale price of a security he does not wish to sell immediately or
where an investor wants to hedge against an anticipated decline in the price of
a security held. True arbitrage situations are rare because it requires only a
few investors to recognize the disparity in price between the two securities and
quickly drive the prices of the respective stocks together through their buying
and selling activities. Another type of arbitrage opportunity occurs (often
called "risk arbitrage") when a public company announces its plans to merge or
combine with another public company. When one publicly-traded company offers its
own stock as the means to purchase another publicly-traded company, there is
often a slight (but sometimes large) relative disparity between the market
prices of the underlying securities of the two companies. This disparity
typically diminishes as it becomes evident that the merger will be consummated.
The disparity or "spread" between the two securities is largely a function of
how investors view the likeliness, or unlikeliness, as the case may be, that the
merger will actually be consummated, or its terms being improved or reduced.
RISKS ASSOCIATED WITH SHORT SELLING. The risk of short-selling occurs
when the price of the underlying security rises. Theoretically, the ultimate
loss in a short-sale-gone-bad is unlimited because the upside potential price
for the security is also unlimited. In certain circumstances, when a security
starts a precipitous rise in price, short-sellers of that security receive
margin calls, whereby they must either come up with additional collateral to
cover the losses on their short position, or cover their short position by
buying back the security in the open market. This activity can lead to what is
termed a "short squeeze", where the price of the stock is driven higher as a
result of the short sellers buying the stock in order to cover their short
positions. The biggest risk in the type of arbitrage transaction described above
is that the deal (e.g., merger or acquisition) ultimately fails to occur. Thus,
it would be the Fund's policy to short only in arbitrage situations where, in
the Advisers' judgment, there is a high likelihood that the transaction will be
consummated.
In a typical merger situation, an acquirer pays a "control" premium
over the market price of the target's stock. The Advisers may establish
investment positions that seek to capture the potential arbitrage profit that
exists if the target company's shares trade at a discount relative to the price
expected to be paid under the terms of the acquisition. Where the merger
agreement establishes a certain amount of the acquirer's stock to be exchanged
for each share of the target, the Advisers may try to profit by purchasing
shares of the target company and selling short shares of the acquirer.
The Fund's ability to successfully engage in the type of arbitrage
transactions described above will depend on the Advisers' experience, judgment
and trading skills, which can prove to be unsatisfactory in a particular
situation. In addition, the Fund's success in this area will be affected by the
outcome of the merger or acquisition transaction, which could be adversely
affected by, among other things, regulatory rulings, legal or tax filings, or
extreme market movements. Changes to the financial component of many announced
transactions could result in a cancellation or change in the terms of the
proposed transaction. Moreover, there could be significant reductions in the
expected return or profitability of a transaction if the closing of the
transaction is delayed. The amount of any loss to the Fund would be increased
(and any gain decreased) by any premium or interest the Fund is required to pay
in connection with a short sale. It is not expected that the current market
value of the securities sold short by the Fund would exceed 10% of the Fund's
net assets. The Fund would not take short positions as speculation, that is, it
would never take a "naked short" position. In addition, because there are tax
implications in shorting against the box, it is unlikely that the Fund would use
positions then held in the Fund's portfolio in an arbitrage short sale situation
unless the Fund had either an unrealized loss on the position or a very slight
unrealized gain on the position.
The Fund's obligation to replace the securities borrowed in connection
with a short sale will be secured by cash or liquid securities deposited as
collateral with the broker. In addition, the Fund will place in a segregated
account with its custodian or a qualified subcustodian an amount of cash or
liquid securities equal to the difference, if any, between (i) the market value
of the securities sold at the time they were sold short and (ii) any cash or
liquid securities deposited as collateral with the broker in connection with the
short sale (not including the proceeds of the short sale). Until it replaces the
borrowed securities, the Fund will maintain the segregated account daily at a
level so that (a) the amount deposited in the account plus the amount deposited
with the broker (not including the proceeds from the short sale) will equal the
current market value of the securities sold short and (b) the amount deposited
in the account plus the amount deposited with the broker (not including the
proceeds from the short sale) will not be less than the market value of the
securities at the time they were sold short.
If the Fund effects a short sale of securities at a time when it has an
unrealized gain on the securities, it may be required to recognize that gain as
if it had actually sold the securities (as a "constructive sale") on the date it
effects the short sale. However, such constructive sale treatment may not apply
if the Fund closes out the short sale with securities other than the appreciated
securities held at the time of the short sale and if certain other conditions
are satisfied. Uncertainty regarding the tax consequences of effecting short
sales may limit the extent to which the Fund may effect short sales.
REQUIRED VOTE. Approval of Proposal No. 2 requires a 1940 Act Majority Vote
of Common Stock. For purposes of this Proxy Statement, a 1940 Act Majority Vote
of Common Stock means the affirmative vote of the lesser of (a) 67% or more of
the Shares of Common Stock present or represented by proxy at the Meeting or (b)
more than 50% of the outstanding Shares of Common Stock.
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE NON-INTERESTED DIRECTORS,
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" PROPOSAL NO. 2.
PROPOSAL NO. 3 : TO APPROVE AN AMENDMENT TO THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION REGARDING INDUSTRY CONCENTRATION
BACKGROUND AND SUMMARY OF PROPOSAL. The Board of Directors recommends
that shareholders approve an amendment to the Fund's fundamental investment
restriction regarding industry concentration. Currently, the Fund's policy
regarding industry concentration states that the Fund may not:
Invest in the securities of issuers conducting their principal business
activity in the same industry if, immediately after such investment,
the value of its investments in such industry would exceed 25% of the
value of its total assets.
Proposal No. 3 would amend this fundamental restriction to permit the Fund to
concentrate in the REIT industry by investing more than 25% of the value of its
assets in Real Estate Investment Trusts (or REITs) or related companies in the
same industry classification as REITs. A REIT is an issuer dedicated to owning,
and usually operating, income-producing real estate, or to financing real
estate. REITs can generally be classified as Equity REITs, Mortgage REITs and
Hybrid REITs. An Equity REIT invests primarily in the fee ownership or leasehold
ownership of land and buildings and derives its income primarily from rental
income. An Equity REIT may also realize capital gains (or losses) by selling
real estate properties in its portfolio that have appreciated (or depreciated)
in value. A Mortgage REIT invests primarily in mortgages on real estate, which
may secure construction, development or long-term loans. A Mortgage REIT
generally derives its income primarily from interest payments on the credit it
has extended. A Hybrid REIT combines the characteristics of both Equity REITs
and Mortgage REITs.
As amended the restriction would read as follows:
The Fund may not:
Invest in the securities of companies conducting their principal
business actively in the same industry if, immediately after such
investment, the value of its investments in such industry would exceed
25% of the value of its total assets; provided that this limitation
will not apply to real estate investment trusts (REITS) or related
companies in the same industry as REITs.
REASONS FOR PROPOSAL. Management believes that concentrating in REITs
could potentially have a beneficial effect on shareholders' total return in that
it will enhance the Fund's ability to obtain higher income while at the same
time mitigating principal risk associated with corporate income producing
securities. In summary:
1. The type of REIT in which the Fund currently invests and intends to
invest typically pays dividends in a range of 2% to 5% higher than yields from
US Government Securities;
2. Historically, REITs have provided protection against inflation which is
one of the greatest risks of investing in long-term income producing securities.
However, in the case of REITs, the value of the underlying asset - the real
estate itself - historically has tended to increase in line with inflation;
3. Because many REITs currently are selling at a discount from their
"intrinsic value" (e.g., the value of their underlying assets), and are, at the
same time, providing relatively higher yields when compared to other higher
quality income producing securities, the Advisers view REITs as one of the more
attractive areas of investment under current market conditions; and
4. REITs often provide a vehicle of diversification in real estate holdings
since they offer owners a broad range of properties, often times all across the
United States, and not concentrated in a single geographic area or type of
holding (e.g. shopping centers, office buildings, residential apartment
complexes).
If this Proposal is approved, the Fund will, under normal market conditions,
invest more than 25% of its total assets in REITs or companies in the same
industry. The portion of the Fund's assets invested in REITs and such other
companies will vary based on market conditions, but it is not expected to exceed
50% of total assets. As of February 28, 2003, 26.9% of the Fund's assets were
invested in REITs. Although the Fund can invest in REITs of any size, the Fund
currently intends to only invest in REITs with a market capitalization greater
than $100 million. The Fund generally will invest in U.S. REITs, which may
invest directly or indirectly in non-U.S. properties.
RISKS ASSOCIATED WITH CONCENTRATION IN REITS. Since the Fund will
concentrate its assets in the real estate industry, your investment in the Fund
will be linked to performance of the real estate markets. Property values may
fall due to increasing vacancies or declining rents resulting from economic,
legal, cultural or technological developments. REIT prices also may drop because
of the failure of borrowers to pay their loans and poor management. Many REITs
utilize leverage which increases investment risk and could adversely affect a
REIT's operations and market value in periods of rising interest rates as well
as risks normally associated with debt financing. In addition, there are risks
associated with particular sectors of real estate investments (e.g., retail,
office, hotel, healthcare and multifamily properties). The Fund does not intend
to focus on any particular sector of real estate investments.
REQUIRED VOTE. Approval of Proposal No. 3 requires a 1940 Act Majority Vote
of Common Stock.
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE NON-INTERESTED DIRECTORS,
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" PROPOSAL NO. 3.
SUBMISSION OF SHAREHOLDER PROPOSALS
All proposals by shareholders of the Fund that are intended to be presented at
the Fund's next Annual Meeting of Shareholders to be held in 2004 must be
received by the Fund for consideration for inclusion in the Fund's proxy
statement relating to the meeting no later than November 19, 2003. Shareholder
proposals, including any accompanying supporting statement, may not exceed 500
words. A shareholder 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 shareholder 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 shareholders, and a shareholder
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.
ADDITIONAL INFORMATION
Compliance with Section 16(a) of the Securities Exchange Act of 1934.
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%
shareholders 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. A proxy which is properly executed
and returned accompanied by instructions to withhold authority to vote
represents a broker "non-vote" (i.e., 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). Proxies that reflect
abstentions or broker non-votes (collectively "abstentions") will be counted as
shares that are present and entitled to vote on the matter for purposes of
determining the presence of a quorum. Under Maryland law, abstentions do not
constitute a vote "for" or "against" a matter and will be disregarded in
determining the "votes cast" on Proposal No. 1 and will have the effect of a
vote against Proposal Nos. 2 and 3.
OTHER MATTERS TO COME BEFORE THE MEETING
The Fund does not intend to present any other business at the Meeting,
nor are they aware that any shareholder 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 judgment.
--------------------------------------------------------------------------------
It is important that proxies be returned promptly. Shareholders who do not
expect to attend the meeting are therefore urged to complete, sign, date and
return all proxy cards as soon as possible in the enclosed postage-paid
envelope.
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PROXY
BOULDER GROWTH & INCOME FUND, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned holder of shares of Common Stock of Boulder Growth & Income
Fund, Inc., a Maryland corporation (the "Fund"), hereby appoints Stephen C.
Miller, Carl D. Johns, and Thomas N. Calabria, attorneys-in-fact and proxies for
the undersigned, with full powers of substitution and revocation, to represent
the undersigned and to vote on behalf of the undersigned all shares of Common
Stock, which the undersigned is entitled to vote at the Annual Meeting of
Shareholders of the Fund to be held at the Doubletree La Posada Resort, 4949 E.
Lincoln Dr., Scottsdale, Arizona 85253 at 10:00 a.m. Mountain Standard Time, on
April 22, 2003, and any adjournments thereof. The undersigned hereby
acknowledges receipt of the Notice of Annual Meeting and Proxy Statement and
hereby instructs said attorneys-in-fact and proxies to vote said shares as
indicated hereon. 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 shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
ELECTION OF THE NOMINEEs AS DIRECTORs AND FOR PROPOSAL 2 and proposal 3. The
Board of Directors recommends that the shareholders vote "For" approval of each
of Proposals 1, 2 and 3.
Please refer to the Proxy Statement for a discussion of the Proposals.
1. Election of Directors.
Nominees: Susan L. Ciciora and Joel W. Looney
FOR ____ WITHHELD ____ FOR ALL EXCEPT ____
2. To approve the elimination of the Fund's fundamental investment restriction
regarding short sales.
FOR ____ AGAINST ____ ABSTAIN ____
3. To approve an amendment to the Fund's fundamental investment restriction
regarding industry concentration.
FOR ____ AGAINST ____ ABSTAIN ____
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,
EITHER may sign this Proxy. When signing as attorney, executor, administrator,
trustee, guardian or corporate officer, please give your full title.
Signature:
-------------------------
Date:
-------------------------
Signature:
-------------------------
Date:
-------------------------
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ENDNOTES:
* The Fund's fiscal year end was changed from June 30 to November 30 in 2002.
1 Former Directors of the Fund (i.e., prior to January 28, 2002) were Timothy J.
Ebner, Gustavo E. Gonzales, Jr., Ben H. Love , Judith L. Craven, Dr. Norman
Hackerman, John W. Lancaster and F. Robert Paulsen. Between July 1, 2001 and
December 31, 2001 such directors were paid $31,706.