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
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
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Under Rule 14a-12
Blue Chip Value 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)
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 transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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 identify 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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BLUE CHIP VALUE FUND, INC.
1225 Seventeenth Street
26th Floor
Denver, Colorado 80202
Denver, Colorado
April 2, 2002
To Our Stockholders:
It is our pleasure to invite you to your Fund's Annual Meeting of
Stockholders to be held at the offices of Denver Investment Advisors LLC, 1225
Seventeenth Street, 26th Floor, Denver, Colorado, on Tuesday, May 7, 2002, at
12:00 noon (Mountain time). Formal notice of the meeting appears on the next
page and is followed by the Proxy Statement.
We hope you will find it convenient to attend, but we urge you, in any
event, to complete and return the enclosed proxy card in the envelope provided.
If you do attend, you may vote in person if you so desire.
The Annual Report of the Blue Chip Value Fund, Inc. for the year ended
December 31, 2001 has previously been mailed to stockholders of record. It is
enclosed with this mailing to beneficial owners of the Fund's stock who may not
have previously received it. The Annual Report is not to be considered proxy
soliciting material.
Sincerely,
/s/ Todger Anderson, CFA
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Todger Anderson, CFA
PRESIDENT
YOUR VOTE IS IMPORTANT
WE CONSIDER THE VOTE OF EACH STOCKHOLDER IMPORTANT, WHATEVER THE NUMBER OF
SHARES HELD. IF YOU ARE UNABLE TO ATTEND THE MEETING IN PERSON, PLEASE SIGN,
DATE, AND RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE AT YOUR EARLIEST
CONVENIENCE. THE PROMPT RETURN OF YOUR PROXY WILL SAVE EXPENSE TO YOUR FUND.
BLUE CHIP VALUE FUND, INC.
1225 Seventeenth Street
26th Floor
Denver, Colorado 80202
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Denver, Colorado
April 2, 2002
To the Stockholders of
Blue Chip Value Fund, Inc.:
The Annual Meeting of Stockholders of Blue Chip Value Fund, Inc. (the
"Fund") will be held at the offices of Denver Investment Advisors LLC, 1225
Seventeenth Street, 26th Floor, Denver, Colorado, on Tuesday, May 7, 2002, at
12:00 noon (Mountain time), for the following purposes:
1. To elect two (2) Class II directors to serve until the Annual Meeting
of Stockholders in the year 2005 and until the election and
qualification of their successors.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The subjects referred to above are discussed in the Proxy Statement
attached to this Notice. Each Stockholder is invited to attend the Annual
Meeting in person. Holders of record at the close of business on March 19, 2002
are entitled to receive notice of and to vote at the Meeting. IF YOU CANNOT BE
PRESENT AT THE ANNUAL MEETING, WE URGE YOU TO FILL IN, SIGN, AND PROMPTLY RETURN
THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR
CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IN ORDER TO
AVOID THE ADDITIONAL EXPENSE TO THE FUND OF FURTHER SOLICITATION, WE ASK YOUR
COOPERATION IN COMPLETING AND RETURNING YOUR PROXY PROMPTLY.
/s/ W. Bruce McConnel, III
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W. Bruce McConnel, III
Secretary
ANNUAL MEETING OF STOCKHOLDERS
OF
BLUE CHIP VALUE FUND, INC.
1225 SEVENTEENTH STREET
26TH FLOOR
DENVER, COLORADO 80202
PROXY STATEMENT
April 2, 2002
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Blue Chip Value Fund, Inc. (the "Fund") for
use at the Fund's Annual Meeting of Stockholders to be held at the offices of
Denver Investment Advisors LLC, 1225 Seventeenth Street, 26th Floor, Denver,
Colorado, on Tuesday, May 7, 2002, at 12:00 noon (Mountain time), and at any
adjournment thereof (the "Meeting").
Any person giving a proxy may revoke it at any time prior to its use.
Signed proxies received by the Fund in time for voting and not so revoked will
be voted in accordance with the directions specified therein. The Board of
Directors recommends a vote FOR the election of directors as listed. If no
specification is made, the proxy will be voted for the election of directors as
listed.
Costs of soliciting proxies will be borne by the Fund. Morrow & Co. has
been retained to solicit proxies in connection with the Meeting for a fee of
approximately $3,000 and reimbursement for all out-of pocket expenses. It is
anticipated that banks, brokerage houses, and other custodians will be requested
on behalf of the Fund to forward solicitation material to their principals to
obtain authorizations for the execution of proxies. In addition to soliciting
proxies by use of the mail, some of the officers of the Fund and persons
affiliated with Denver Investment Advisors LLC, the Fund's investment adviser,
may, without remuneration, solicit proxies personally or by telephone or
telefax.
On March 19, 2002, the record date for determining the Stockholders
entitled to vote at the Meeting, there were outstanding 21,051,085 shares of
common stock, constituting all of the Fund's outstanding voting securities. Each
share of common stock is entitled to one vote. This Proxy Statement, the
accompanying Notice of Annual Meeting of Stockholders, and the enclosed proxy
are being mailed on or about April 2, 2002 to Stockholders of record on the
record date.
THE FUND PREPARES AND MAILS TO ITS STOCKHOLDERS FINANCIAL REPORTS ON A
SEMI-ANNUAL BASIS. THE FUND WILL FURNISH TO STOCKHOLDERS UPON REQUEST, WITHOUT
CHARGE, COPIES OF ITS ANNUAL REPORT TO STOCKHOLDERS, CONTAINING AUDITED
FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001. REQUESTS FOR
SUCH ANNUAL REPORT SHOULD BE DIRECTED TO MR. JASPER R. FRONTZ, TREASURER, BLUE
CHIP VALUE FUND, INC., 1225 SEVENTEENTH STREET, 26TH FLOOR, DENVER, COLORADO
80202 OR TELEPHONE TOLL-FREE (800) 624-4190. THE ANNUAL REPORT IS NOT TO BE
REGARDED AS PROXY SOLICITING MATERIAL.
NOMINEES FOR ELECTION AS DIRECTORS
The Fund's By-Laws provide that the Board of Directors shall consist of
three classes of members. Directors are chosen for a term of three years and the
term of one class of directors expires each year. The Board of Directors has
designated two candidates, who are presently directors of the Fund, for whom
proxies solicited by the Fund will be voted if requisite authority is granted.
The following table sets forth the nominees for election as directors and
the other directors, their ages, term of office, including length of time served
as a director, principal occupations for the past five or more years, any other
directorships they hold in companies which are subject to the reporting
requirements of the Securities Exchange Act of 1934 or are registered as
investment companies under the Investment Company Act of 1940, as amended (the
"1940 Act"), and the number of portfolios in the Fund Complex that they oversee.
The Fund Complex includes funds with a common or affiliated investment adviser.
The Fund Complex is comprised of the Fund, consisting of one portfolio and
Westcore Funds, of which there are twelve portfolios.
NOMINEES FOR ELECTION - TO BE ELECTED FOR A TERM OF THREE YEARS UNTIL THE ANNUAL
MEETING IN THE YEAR 2005.
INDEPENDENT DIRECTORS
LEE W. MATHER, JR.
6 Francine Drive, Greenwich, Connecticut 06830
AGE: 58
POSITION(S) HELD WITH THE FUND AND TERM OF OFFICE: Class II Director since 2001.
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS: Director, American Rivers
(conservation organization), Washington, D.C. (since June 2000); former
investment banker, Merrill Lynch & Co., New York, New York (January 1977 until
April 2000).
OTHER DIRECTORSHIPS HELD: None.
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: One.
RICHARD C. SCHULTE
P.O. Box 952, Evergreen, Colorado 80437-0952
AGE: 57
POSITION(S) HELD WITH THE FUND AND TERM OF OFFICE: Class II Director since 1987.
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS: Private Investor; until 1996,
President, Transportation Service Systems, Inc. (since 1993); Employee, Southern
Pacific Lines, Denver, Colorado (since 1993). Prior thereto, Employee, Rio
Grande Industries, Denver, Colorado (holding company) (since 1991), Vice
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President Finance and Treasurer, Rio Grande Holdings, Inc., Denver, Colorado
(since 1990), and Vice President, Denver & Rio Grande Western Railroad Company,
Denver, Colorado (since 1990).
Mr. Shulte's daughter was employed as a summer intern at the Fund's investment
adviser, Denver Investment Advisors LLC, from May to July of 1998.
OTHER DIRECTORSHIPS HELD: None.
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: One.
OTHER DIRECTORS
INTERESTED DIRECTORS
TODGER ANDERSON, CFA*
1225 Seventeenth Street, 26th Floor, Denver, Colorado 80202.
AGE: 57
POSITION(S) HELD WITH THE FUND AND TERM OF OFFICE: Class I Director from 1988
until 1995, and since 1998.** Term as Director expires in 2004. President of the
Fund since 1987.
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: President and Executive Manager,
Denver Investment Advisors LLC (since 1995); prior thereto, President and
Director of Portfolio Management, Denver Investment Advisors, Inc.; Portfolio
Manager, Westcore MIDCO Growth Fund (since 1986); Portfolio Co-Manager, Westcore
Select Fund (since 2001).
OTHER DIRECTORSHIPS HELD: None.
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: One.
KENNETH V. PENLAND, CFA*
1225 Seventeenth Street, 26th Floor, Denver, Colorado 80202
AGE: 59
POSITION(S) HELD WITH THE FUND AND TERM OF OFFICE: Chairman of the Board and
Class III Director since 1987. Term as Director expires in 2003.
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* Messrs. Anderson and Penland may be deemed to be "interested persons" of the
Fund, as that term is defined in the 1940 Act, by virtue of their affiliations
with the Fund's investment adviser and their status as officers of the Fund.
** Mr. Anderson previously served as a director of the Fund from May 12, 1988 to
March 31, 1995. Mr. Anderson resigned on March 31, 1995 because of a change in
control of the Fund's investment adviser, and in order to comply with the
provisions of Section 15(f) of the 1940 Act that at least 75% of the directors
of the Fund were required to be disinterested directors for a period of three
years following the change in control. Mr. Anderson was re-elected to the Board
of Directors at the 1998 Annual Meeting of Stockholders.
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PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired, from 1995 until December
2001, Chairman and Executive Manager, Denver Investment Advisors LLC; prior
thereto Chairman of the Board and Director of Research, Denver Investment
Advisors, Inc.; President and Trustee, Westcore Funds.
OTHER DIRECTORSHIPS HELD: None.
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: Thirteen.
INDEPENDENT DIRECTORS
ROBERT J. GREENEBAUM
828 Kimballwood Lane, Highland Park, Illinois 60035
AGE: 84
POSITION(S) HELD WITH THE FUND AND TERM OF OFFICE: Class I Director since 1988.
Term expires in 2004.
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Independent Consultant; former
Director, United Asset Management Corp., Boston, Massachusetts (February 1982
until May, 2000); former Chairman of the Board and Director, Selected American
Shares, Inc. and Selected Special Shares, Inc., Santa Fe, New Mexico (January
1970 until December, 1997); former Chairman of the Board and Trustee, Selected
Capital Preservation Trust, Santa Fe, New Mexico (September 1985 until December,
1997). Mr. Greenebaum provides consulting services from time to time to Denver
Investment Advisors LLC.
OTHER DIRECTORSHIPS HELD: None.
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: One.
GARY P. MCDANIEL
32023 County Road 15, Elizabeth, Colorado 80107
AGE: 56
POSITION(S) HELD WITH THE FUND AND TERM OF OFFICE: Class I Director since 2001.
Term expires in 2004.
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Chief Executive Officer, Chateau
Communities, Inc. (REIT/manufactured housing) (since 1997); prior thereto, Chief
Executive Officer ROC Communities, Inc. (REIT/manufactured housing) (1980 -
1997).
OTHER DIRECTORSHIPS HELD: None.
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: One.
ROBERTA M. WILSON, CFA
9268 Weld County Road, #28, Platteville, Colorado 80651
AGE: 58
POSITION(S) HELD WITH THE FUND AND TERM OF OFFICE: Class III Director since
1987. Term expires in 2003.
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired; from 1985 until July
1998, Director of Finance, Denver Board of Water Commissioners, Denver,
Colorado.
OTHER DIRECTORSHIPS HELD: None.
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN: One.
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OFFICERS
Information concerning the names, ages, positions with the Fund, term of
office, including length of time served as an officer, current affiliations, and
principal occupations of the principal officers of the Fund, other than Messrs.
Anderson and Penland, is set out below. Information concerning Messrs. Anderson
and Penland is set forth on pages 3-4.
Officers of the Fund are elected by the Board of Directors and, subject to
the earlier termination of office, each officer holds office for the term of one
year and until his or her successor is elected and qualified.
CHARLOTTE PETERSEN, CFA
1225 Seventeenth Street, 26th Floor, Denver, Colorado 80202
AGE: 41.
POSITION HELD WITH THE FUND AND TERM OF OFFICE: Vice President of the Fund since
2000.
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS: Vice President, Denver
Investment Advisors LLC (since 1995); prior thereto Vice President, Denver
Investment Advisors, Inc. (since 1993); Portfolio Manager, Westcore Blue Chip
Fund (since January 2000).
W. BRUCE MCCONNEL, III
1 Logan Square, 18th and Cherry Streets, Philadelphia, Pennsylvania 19103
AGE: 59.
POSITION HELD WITH THE FUND AND TERM OF OFFICE: Secretary of the Fund since
1987.
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS: Partner of the law firm of
Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania; Secretary, Westcore
Funds (since 1985).
JASPER R. FRONTZ, CPA
1225 Seventeenth Street, 26th Floor, Denver, Colorado 80202
AGE: 33.
POSITION HELD WITH THE FUND AND TERM OF OFFICE: Treasurer of the Fund since
1997.
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS: Vice President, Denver
Investment Advisors LLC (since 2000); Director of Mutual Fund Administration,
Denver Investment Advisors LLC (since 1997); prior thereto, Fund Controller,
ALPS Mutual Funds Services, Inc. (1995-1997); Senior Accountant, Deloitte &
Touche LLP (1991-1995); Treasurer, Westcore Funds (since 1997); Registered
Representative, ALPS Distributors, Inc. (since 1995).
No director or officer of the Fund who is also a director, officer, or
employee of the investment adviser or any of its parents, received any
remuneration from the Fund during 2001. The other directors taken as a group
were either paid or had accrued directors' fees for 2001 from the Fund in the
aggregate amount of $49,183.
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In 2001 the directors received an annual retainer of $6,000 for serving as
directors, plus a meeting fee of $1,500 for each regular Board meeting attended.
Effective May 8, 2001, the directors' compensation was clarified to include
reimbursement for out-of-pocket expenses incurred in attending Board meetings.
The Fund expects the basis of such compensation will be the same during 2002.
The Board of Directors held four regularly scheduled meetings during the year
ended December 31, 2001. Each of the directors attended every Board meeting.
The following table provides information concerning the compensation of
each of the Fund's directors for services rendered during the Fund's fiscal year
ended December 31, 2001:
COMPENSATION TABLE
TOTAL
PENSION OR COMPENSATION
AGGREGATE RETIREMENT BENEFITS ESTIMATED FROM FUND AND
COMPENSATION ACCRUED AS PART OF ANNUAL BENEFITS FUND COMPLEX
NAME OF PERSON FROM FUND FUND EXPENSES UPON RETIREMENT PAID TO DIRECTORS
-------------- --------- ------------- --------------- -----------------
Todger Anderson $ -0- $ -0- $ -0- $ -0-
Robert J. Greenebaum $12,000 $ -0- $ -0- $12,000
Lee W. Mather, Jr. $ 7,183 $ -0- $ -0- $ 7,183
Gary P. McDaniel $ 6,000 $ -0- $ -0- $ 6,000
Kenneth V. Penland $ -0- $ -0- $ -0- $ -0-
Richard C. Schulte $12,000 $ -0- $ -0- $12,000
Roberta M. Wilson $12,000 $ -0- $ -0- $12,000
Drinker Biddle & Reath LLP, of which W. Bruce McConnel, III, Secretary of
the Fund, is a partner, received legal fees during the fiscal year ended
December 31, 2001 for services rendered as the Fund's legal counsel.
OWNERSHIP OF FUND SHARES
The following table sets forth, as of March 15, 2002, beneficial ownership
of the Fund's shares by (1) each director and each nominee for director (2) all
directors, nominees for director and executive officers as a group:
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DOLLAR RANGE
OF EQUITY NUMBER OF SHARES PERCENT
NAME SECURITIES OWNED BENEFICIALLY OWNED(1) OF CLASS
---- ---------------- --------------------- --------
Todger Anderson over $100,000 152,434 *
Robert J. Greenebaum over $100,000 22,733 *
Lee W. Mather, Jr. over $100,000 30,000 *
Gary P. McDaniel $1 - $10,000 1,286 *
Kenneth V. Penland over $100,000 331,082(2) 1.3%
Richard C. Schulte $10,001 - $50,000 3,675(3) *
Roberta M. Wilson $10,001 - $50,000 4,844(4) *
All directors and
executive officers and nominees
for director as a group 546,054 2.2%
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(1) Unless otherwise indicated the beneficial owner has sole voting and
investment power. The number of shares beneficially owned includes the
maximum number of shares that each beneficial owner had the right to
acquire in the exercise of the Primary Subscription Privilege under the
terms of the Fund's rights offering that commenced on February 22, 2002.
Messrs. Anderson, Greenebaum, Mather, McDaniel, Penland and Schulte, and
Ms. Wilson each had the right to acquire: 25,406; 3,789; 5,000; 214;
55,180; 613 and 807 shares, respectively. The number of shares actually
subscribed for may be less than the amounts shown above. These amounts do
not include any shares that may be issued pursuant to the Oversubscription
Privilege.
(2) Including 93,176 shares held by Mr. Penland, 126,042 shares owned by Mr.
Penland's wife, 36,222 shares jointly owned by Mr. Penland and his wife,
and 75,642 shares owned in a trust for Mr. Penland's daughter.
(3) These shares include 2,244 that are owned by Mr. Schulte's wife.
(4) These shares are owned jointly by Ms. Wilson and her husband.
* Less than 1%.
STANDING BOARD COMMITTEES
The Board has established two standing committees in connection with the
governance of the Fund: Audit and Nominating.
The Fund's Audit Committee is composed of all of the independent directors.
The members of the Audit Committee are also considered independent as defined in
the New York Stock Exchange Listing Standards. The members of the Audit
Committee are Messrs. Greenebaum, Mather, McDaniel and Schulte, and Ms. Wilson.
The functions of the Audit Committee are to meet with the Fund's independent
auditors to review the scope and findings of the annual audit, review matters of
independence, discuss the Fund's accounting policies, discuss any recommendation
of the independent auditors with respect to the Fund's management practices,
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review the impact of changes in accounting standards upon the Fund's financial
statements, recommend to the Board of Directors the selection of independent
auditors, and perform such other duties as may be assigned to the Audit
Committee by the Board of Directors. The Audit Committee met once during the
fiscal year ended December 31, 2001.
The Audit Committee has met with Fund management to discuss, among other
things, the Fund's audited financial statements for the year ended December 31,
2001. The Audit Committee has also met with the Fund's independent accountants
and discussed with them certain matters required under SAS 61 (Codification of
Statements on Auditing Standards, AU ss. 380) as may be modified or supplemented
from time to time, including, but not limited to, the scope of the Fund's audit,
the Fund's financial statements and the Fund's accounting controls. The Audit
Committee has received written disclosures and the letter from the Fund's
independent accountants required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), as may be modified or
supplemented from time to time, and has discussed with the independent
accountants, their independence. Based upon these reviews and discussions, the
Audit Committee recommended to the Board of Directors that the Fund's audited
financial statements be included in the Fund's 2001 Annual Report to
Stockholders for the year ended December 31, 2001. The Audit Committee adopted a
written charter in February 2000, a copy of which is attached hereto as Appendix
A.
The Fund's Nominating Committee is comprised of all independent directors.
The members of the Nominating Committee are: Messrs. Greenebaum, Mather,
McDaniel and Schulte, and Ms. Wilson. The Nominating Committee is responsible
for the selection and nomination of candidates to serve as directors. Although
the Nominating Committee expects to be able to find an adequate number of
candidates to serve as directors, the Nominating Committee is willing to
consider nominations received from Stockholders at the address on the front of
this Proxy Statement. In order for any other person to be nominated for election
to the Board of Directors at this Meeting, the By-Laws require the proposed
nominee to notify the Fund in writing by the tenth day following the day on
which notice of the Meeting is mailed and to provide such written information to
the Fund as its Secretary may reasonably require. This Proxy Statement is
expected to be mailed on April 2, 2002, and, if such occurs, any such notice
must be received by the Fund on or before April 12, 2002. The Nominating
Committee met once during the fiscal year ended December 31, 2001.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 30(f) of the 1940 Act and Section 16(a) of the Securities Exchange
Act of 1934 require the Fund's directors and officers, certain affiliated
persons of the investment adviser, and persons who own more than ten percent of
the Fund's shares to file with the Securities and Exchange Commission and the
New York Stock Exchange initial reports of ownership and reports of changes in
ownership of shares of the Fund. Specific due dates for these reports have been
established and the Fund is required to disclose in this Proxy Statement any
failure to file by the specific due dates. To the Fund's knowledge, all of these
filing requirements were satisfied during 2001. In making these disclosures, the
Fund has relied on copies of reports that were furnished to it and written
representations of its directors, officers and investment adviser.
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RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of the Audit Committee, the Board has re-appointed
Deloitte & Touche LLP ("Deloitte & Touche") as the Fund's independent auditors
for the fiscal year ending December 31, 2002. As discussed further below,
Deloitte & Touche served as the Fund's independent auditors for the fiscal years
ended December 31, 2000 and 2001. Prior to that time Ernst & Young LLP ("Ernst &
Young") served as the Fund's independent auditors.
On February 8, 2000, Ernst & Young LLP resigned as the Fund's independent
auditors. During the Fund's fiscal years ended December 31, 1999 and 1998, Ernst
& Young's reports on the Fund's financial statements contained no adverse
opinion or disclaimer of opinion, nor were they qualified or modified as to
uncertainty, audit scope, or accounting principles. During the Fund's fiscal
years ended December 31, 1999 and 1998, there were no disagreements with Ernst &
Young on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of Ernst & Young, would have caused it to make reference to
the subject matter of the disagreement in connection with its report on the
financial statements for such years. During the Fund's fiscal years ended
December 31, 1999 and 1998, there were no events of the kind described in Item
304(a)(1)(v) of Regulation S-K under the Securities Exchange Act of 1934.
On February 8, 2000, after recommendation by the Board's Audit Committee,
the Fund, by action of its Board of Directors, including a majority of the
members of the Board of Directors who are not "interested persons" of the Fund
(as that term is defined in the 1940 Act), selected Deloitte & Touche as the
independent auditors to audit the Fund's financial statements for the fiscal
year ended December 31, 2000. During the Fund's fiscal years ended December 31,
1999 and 1998, neither the Fund nor anyone on its behalf has consulted Deloitte
& Touche on items which (i) concerned the application of accounting principles
to a specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Fund's financial statements, or (ii)
concerned the subject of a disagreement (as defined in paragraph (a)(1)(iv) of
Item 304 of Regulation S-K) or reportable events (as described in paragraph
(a)(1)(v) of said Item 304).
INDEPENDENT AUDITOR'S FEES
AUDIT FEES: For the Fund's fiscal year ended December 31, 2001, the
aggregate fees paid by the Fund to Deloitte & Touche for the annual audit of the
Fund's financial statements were $15,600.
ALL OTHER FEES: For the same period, aggregate fees of $26,900 were paid by
the Fund and Denver Investment Advisors LLC to Deloitte & Touche for other
services, including tax return preparation for the Fund and examination of
portfolio composites managed by Denver Investment Advisors LLC for compliance
with standards established by the Association for Investment Management and
Research ("AIMR") for the year ended December 31, 2001.
-9-
The auditors did not provide any professional services related to financial
information systems design and implementation. The Audit Committee has
considered the level of non-audit services provided by the auditors to the
Fund's investment adviser in its deliberations of auditor independence.
Representatives of Deloitte & Touche are not expected to be present at the
Meeting, but will be available by telephone to respond to appropriate questions
from Stockholders, if necessary.
The Board of Directors recommends that Stockholders vote FOR the election
of Messrs. Mather and Schulte and as Class II directors to serve until the
Annual Meeting of Stockholders in the year 2005 and until the election and
qualification of their successors.
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VOTES REQUIRED FOR THE ELECTION OF DIRECTORS AND
APPROVAL OF MATTERS AT THE MEETING
A quorum for the transaction of business at the Meeting is constituted by
the presence in person or by proxy of holders of a majority of the outstanding
shares of common stock of the Fund. If a Proxy is properly executed and returned
accompanied by instructions to withhold authority, or is marked with an
abstention, the shares represented thereby will be considered to be present at
the Meeting for purposes of determining the existence of a quorum for the
transaction of business. In the election of directors, the nominees receiving
the highest number of votes cast at the Meeting will be elected, assuming that
each receives the votes of a majority of the outstanding shares of common stock.
The withholding of voting authority with respect to the election of a director
means that the shares withheld will not be counted toward the required majority.
Abstentions will have the effect of a "no vote" for purposes of obtaining the
requisite approval. Broker "non-votes" (i.e., proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other persons entitled to vote shares on a particular matter with
respect to which the brokers or nominees do not have discretionary power) will
be treated the same as abstentions.
OTHER BUSINESS
The Management of the Fund does not know of any other matters to be brought
before the Meeting. If such matters are properly brought before the Meeting,
proxies not limited to the contrary will be voted in accordance with the best
judgment of the person or persons acting thereunder. To propose any business for
consideration at this Meeting (other than matters included in this Proxy
Statement), the By-Laws require a Stockholder to notify the Fund in writing by
the tenth day following the day on which notice of the meeting is mailed and to
provide such written information to the Fund as its Secretary may reasonably
require. This Proxy Statement is expected to be mailed to Stockholders on April
2, 2002, and, if such occurs, any such notice must be received by the Fund on or
before April 12, 2002.
ADDITIONAL INFORMATION
INVESTMENT ADVISER
Denver Investment Advisors LLC ("DIA") serves as investment adviser for the
Fund and is located at 1225 Seventeenth Street, 26th Floor, Denver, CO 80202.
CO-ADMINISTRATORS
DIA and ALPS Mutual Funds Services, Inc. ("ALPS") serve as
co-administrators for the Fund. ALPS is located at 370 Seventeenth Street, Suite
3100, Denver, CO 80202.
STOCKHOLDER PROPOSALS - ANNUAL MEETING IN THE YEAR 2003
A Stockholder who intends to present a proposal which relates to a proper
subject for Stockholder action at the Annual Meeting of Stockholders in the year
2003, and who wishes such proposal to be considered for inclusion in the Fund's
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proxy materials for such meeting, must cause such proposal to be received, in
proper form, at the Fund's principal executive offices no later than November
30, 2002. Any such proposals, as well as any questions relating thereto, should
be directed to the Fund to the attention of its President.
April 2, 2002
STOCKHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH TO HAVE
THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN
IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
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APPENDIX A
BLUE CHIP VALUE FUND, INC.
(THE "FUND")
AUDIT COMMITTEE CHARTER
STATEMENT OF POLICY
The Audit Committee shall oversee the audit process and provide assistance
to the Fund's directors in fulfilling their responsibilities to the Fund
relating to fund accounting, reporting practices of the Fund, and the quality
and integrity of the financial reports of the Fund. In so doing, it is the
responsibility of the Audit Committee to maintain a free and open means of
communication among the directors, the independent accountants and the Fund's
officers. The Fund's independent accountants are ultimately accountable to the
Board of Directors and the Audit Committee, and the Audit Committee and Board of
Directors have the ultimate authority and responsibility to select, evaluate
and, when appropriate, replace the Fund's independent accountants.
PRINCIPAL FUNCTIONS
The Audit Committee shall:
1. Recommend the firm to be employed as the Fund's independent accountants
and the proposed terms of such engagement, and review and approve the discharge
of any such firm.
2. Review, in consultation with the independent accountants, the conduct
and results of the external audit of the financial statements of the Fund, each
certification, report or opinion rendered by the independent accountants in
connection with such audit, the related management letter, and management's
responses to recommendations made by the independent accountants in connection
with such audit.
3. Review any disputes between the service contractors and the independent
accountants that arise in connection with the audit and/or preparation of the
financial statements.
4. Review, in consultation with the independent accountants, the Fund's
officers and the service contractors:
(a) The independent accountant's review of the Fund's accounting and
internal control procedures to check compliance with the rules and regulations
of the SEC and other applicable requirements; and
(b) The review by the independent accountants (or other independent
accountants) of the accounting and internal control procedures of the Fund's
custodian and transfer agent to check compliance with the rules and regulations
of the SEC and other applicable requirements.
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5. Consider, in consultation with the independent accountants, the scope
and plan of the forthcoming external audit and the review of the Fund's
accounting and internal control procedures.
6. Consider, when presented by the Fund's officers, the service contractors
or the independent accountants, material questions of choice with respect to
appropriate accounting principles and practices to be used in the preparation of
the Fund's financial statements.
7. Have the power to inquire into any financial matters in addition to
those set forth above.
8. Review, in consultation with the service contractors, any proposal to
employ the independent accountants to render consulting or other non-audit
services related to the Fund.
9. Report to the entire Board periodically and as requested on the
performance of its responsibilities and its findings.
10. Perform such other functions as may be assigned to it by law, the
Fund's charter, or by-laws, or by the Board.
11. Obtain a formal written statement from the independent accountants
setting forth all relationships with the Fund, consistent with the Independence
Standards Board Standard No. 1 - Independence Discussions with Audit Committee.
12. Discuss with the independent accountants any disclosed relationships or
services that may impact the objectivity and independence of the independent
accountants. In this regard, the Audit Committee shall ensure that the
independent accountants submit on a periodic basis to the Audit Committee a
formal written statement delineating all relationships between the independent
accountants and the Fund and any other relationship that may adversely affect
the independence of the independent accountants.
13. Take, or recommend that the Board take, appropriate action to ensure
the independence of the independent accountants.
14. Discuss with the independent accountants the matters required to be
discussed by Statements on Auditing Standards No.61 - Communications with Audit
Committees.
15. Prepare, with the assistance of the Fund's management and Fund counsel,
the necessary disclosures required of the Audit Committee in the Fund's proxy
statement in connection with its Annual Meeting of Stockholders.
16. Meet periodically with management and the independent accountants in
separate executive session to discuss any matters that the Audit Committee or
these groups believe should be discussed privately with the Audit Committee.
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17. When necessary, authorize and oversee investigations into any matters
within the Audit Committee's scope of responsibilities. The Audit Committee
shall be empowered to retain independent counsel, independent accountants, and
other professionals to assist in the conduct of any investigation.
18. Review and reassess the adequacy of this Charter on an annual basis and
propose any necessary changes for the approval of the full Board.
RESOURCES AND STAFF ASSISTANCE
The appropriate officers of the Fund shall provide or arrange to provide
such information, data and services as the Audit Committee may request. The
Audit Committee shall conduct interviews or discussions, as they deem
appropriate with personnel of the Fund, and/or others whose views would be
considered helpful to the Audit Committee.
MEETINGS
The Audit Committee shall meet at least once each year, to determine the
firm to be recommended to be employed as the Fund's independent accountants and
the proposed terms of such engagement, to discuss and approve the scope of the
next year's audit of the financial statements, and to review the results of the
audit for the prior year.
MEMBERSHIP
The Audit Committee shall consist of at least three directors. The members
of the Audit Committee shall be directors of the Fund who are not "interested
persons" as that term is defined in the Investment Company Act of 1940, and
shall be "independent" as that term is defined by The New York Stock Exchange,
Inc.
Each member of the Audit Committee shall be financially literate, as such
qualification is interpreted by the Board of Directors of the Fund in its
business judgement, or must become financially literate within a reasonable
period of time after his or her appointment to the Audit Committee.
At least one member of the Audit Committee must have accounting or related
financial management expertise, as such qualification is interpreted by the
Board of Directors of the Fund in its business judgement.
The directors of the Fund, by resolution adopted by a majority of such
Board, may:
1. Fill any vacancy on the Audit Committee;
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2. Appoint one or more disinterested directors of the Fund to serve as
alternate members of the Audit Committee, to act in the absence or disability of
members of the Audit Committee with all the powers of such absent or disabled
members; and
3. Remove any director of the Fund from membership on the Audit Committee
at any time, with or without cause.
Adopted: February 8, 2000
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PROXY CARD
BLUE CHIP VALUE FUND, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF BLUE CHIP VALUE FUND,
INC. (THE "FUND") FOR USE AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
MAY 7, 2002 AT 12:00 NOON AT THE OFFICES OF DENVER INVESTMENT ADVISORS LLC, 1225
SEVENTEENTH STREET, 26TH FLOOR, DENVER, COLORADO.
The undersigned hereby appoints Margaret Jurado and Louis J. Kahanek, and
each of them, with full power of substitution, as proxies of the undersigned to
vote at the above-stated Annual Meeting, and all adjournments thereof, all
shares of common stock held of record by the undersigned on the record date for
the Meeting, upon the following matters, and upon any other matter which may
properly come before the Meeting, at their discretion.
1. Election of Directors: Lee W. Mather, Jr.,
Richard C. Shulte
____ FOR all nominees listed (except as marked to the contrary)
____ WITHHOLD AUTHORITY to vote for all nominees listed
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THE NAME(S) ON THE LINE PROVIDED BELOW.)
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2. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Meeting.
Every properly signed proxy will be voted in the manner specified hereon
and, IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO
VOTE FOR THE ELECTION OF DIRECTORS.
PLEASE SIGN, DATE AND RETURN
PROMPTLY. RECEIPT OF NOTICE OF ANNUAL
MEETING AND PROXY STATEMENT IS HEREBY
ACKNOWLEDGED.
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Sign here exactly as name(s) appear(s)
on left
Date:
IMPORTANT - Joint owners must EACH
sign. When signing as attorney,
trustee, executor, administrator,
guardian, or corporate officer, please
give your FULL title.