<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
(RULE 14A-101)
REQUIRED IN PROXY STATEMENT
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:
[X] Preliminary Proxy Statement
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Blue Chip Value 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 transaction 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 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:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
BLUE CHIP VALUE FUND, INC.
1225 SEVENTEENTH STREET
26TH FLOOR
DENVER, COLORADO 80202
Denver, Colorado
April __, 1998
To Our Stockholders:
It is our pleasure to invite you to your Company's Annual Meeting of
Stockholders to be held at Westin Tabor Center, 1672 Lawrence Street, Denver,
Colorado, on Tuesday, May 12, 1998, 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, 1997 has previously been mailed to stockholders of record. It is
enclosed with this mailing to beneficial owners of the company's stock who may
not have previously received it. The Annual Report is not to be considered
proxy soliciting material.
Sincerely,
Kenneth V. Penland
Chairman
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
COMPANY.
<PAGE>
BLUE CHIP VALUE FUND, INC.
1225 SEVENTEENTH STREET
26TH FLOOR
DENVER, COLORADO 80202
--------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
--------------
Denver, Colorado
April __, 1998
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 Westin Tabor Center, 1672 Lawrence Street, Denver,
Colorado, on Tuesday, May 12, 1998, at 12:00 noon (Mountain time), for the
following purposes:
1. To elect two (2) Class I directors to serve until the Annual
Meeting of Stockholders in the year 2001 and until the election
and qualification of their successors.
2. To ratify the appointment by the Board of Directors of Ernst &
Young LLP as the Fund's independent auditors for its fiscal year
ending December 31, 1998.
3. To approve a change to the Fund's fundamental investment policies
and limitations regarding investment of 75% of its total assets in
equity securities of large domestic companies ("Proposal 3").
4. To approve the termination of the Fund's fundamental policy which
prohibits the purchase of securities on margin and the adoption of
a non-fundamental policy to permit the Fund to engage in such
transactions in certain limited circumstances ("Proposal 4").
5. To approve the termination of the Fund's fundamental policy which
prohibits short sales of securities and the adoption of a non-
fundamental policy to permit the Fund to engage in such
transactions in certain circumstances ("Proposal 5").
6. To approve the termination of the Fund's fundamental policies
which prohibit the purchase of commodities, commodity contracts,
futures, warrants, rights, options or indices and approve the
adoption of a non-fundamental policy that would prohibit the
purchase of commodities, commodity contracts or futures, except
financial futures. ("Proposal 6")
<PAGE>
7. To approve the termination of the Fund's fundamental policy
prohibiting borrowing in most circumstances and the adoption of a
non-fundamental policy to permit leverage of up to 15% of total
assets and certain other borrowings ("Proposal 7").
8. 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 10, 1998
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.
W. Bruce McConnel, III
Secretary
<PAGE>
ANNUAL MEETING OF STOCKHOLDERS
OF
BLUE CHIP VALUE FUND, INC.
1225 SEVENTEENTH STREET
26TH FLOOR
DENVER, COLORADO 80202
---------------
PROXY STATEMENT
---------------
April __, 1998
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 Westin Tabor
Center, 1672 Lawrence Street, Denver, Colorado, on Tuesday, May 12, 1998, 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, FOR the
appointment by the Board of Directors of Ernst & Young LLP as the Fund's
independent auditors and FOR Proposals 3-7. If no specification is made, the
proxy will be voted for the election of Directors as listed, for the appointment
of Ernst & Young LLP as auditors and for Proposals 3-7.
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 $7,500. 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 mails,
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 10, 1998, the record date for determining the
<PAGE>
Stockholders entitled to vote at the Meeting, there were outstanding 14,519,942
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 __, 1998 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, 1997. 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.
1. 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 for whom proxies solicited by the Fund will be
voted if requisite authority is granted. One of the nominees is presently a
director of the Fund and the other is its President. 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 __, 1998, and,
if such occurs, any such notice must be received by the Fund on or before April
__, 1998.
The following table sets forth by class the nominees and the other
directors, their ages, principal occupations for the past five or more years,
and 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").
-2-
<PAGE>
NOMINEES FOR CLASS I DIRECTOR - to be elected for a term of three years until
the Annual Meeting in the year 2001
- ------------------------------------------------------------------------------
TODGER ANDERSON, C.F.A./*/
1225 Seventeenth Street, 26th Floor, Denver, Colorado 80202
President of the Fund
President and Executive Manager, Denver Investment Advisors LLC (since 1995);
prior thereto President and Director of Portfolio Management, Denver Investment
Advisors, Inc. and former director of the Fund; Portfolio Manager, Westcore
MIDCO Growth Fund (since 1986). Age 53.
ROBERT J. GREENEBAUM
111 W. Washington Street, Room 957, Chicago, Illinois 60602
Director of the Fund
Independent Consultant; former Chairman of the Board and Director, Selected
American Shares, Inc. and Selected Special Shares, Inc., Santa Fe, New Mexico;
Director, United Asset Management Corp., Boston, Massachusetts; former Chairman
of the Board and Trustee, Selected Capital Preservation Trust, Santa Fe, New
Mexico. Mr. Greenebaum provides consulting services from time to time to Denver
Investment Advisors LLC. Age 80.
- ---------------------
/*/. Mr. Anderson is an "interested person" of the Fund, as that term is
defined in the 1940 Act, because Mr. Anderson is an officer and executive
manager of the investment adviser and an officer of the Fund.
-3-
<PAGE>
OTHER DIRECTORS:
- ---------------
CLASS II DIRECTORS - term expires in 1999.
ROBERT M. INMAN
1450 So. Clayton Street, Denver, Colorado 80210
Director of the Fund
Real Estate Investment Advisor and Consultant (since 1988) (real estate
development and construction); former Director, First National Bank of Parker,
N.A., Parker, Colorado. Age 57.
RICHARD C. SCHULTE
34507 Squaw Pass Road, Evergreen, Colorado 80439
Director of the Fund
Private Investor; prior thereto President, Transportation Service Systems, Inc.
(since 1993); prior thereto Employee, Southern Pacific Lines, Denver, Colorado.
Prior thereto, Employee, Rio Grande Industries, Denver, Colorado (holding
company) (since 1991), Vice President Finance and Treasurer, Rio Grande
Holdings, Inc., Denver, Colorado (since 1990), and Vice President, Denver & Rio
Grande Western Railroad Company, Denver, Colorado. Age 53.
CLASS III DIRECTORS - term expires in the year 2000
KENNETH V. PENLAND, C.F.A./*/*/
1225 Seventeenth Street, 26th Floor, Denver, Colorado 80202
Chairman of the Board and Director of the Fund
Chairman and Executive Manager, Denver Investment Advisors LLC (since 1995);
prior thereto Chairman of the Board and Director of Research, Denver Investment
Advisors, Inc.; President, Westcore Funds. Age 55.
ROBERTA M. WILSON, C.F.A.
1600 W. Twelfth Avenue, Denver, Colorado 80254
Director of the Fund
Director of Finance, Denver Board of Water Commissioners, Denver,
- -------------------------
/*//*/Mr. Penland is an "interested person" of the Fund, as that term is
defined in the 1940 Act, because Mr. Penland is an officer and executive manager
of the investment adviser and an officer and director of the Fund.
-4-
<PAGE>
Colorado. Age 54.
Messrs. Penland and Inman and Ms. Wilson have served as directors of
the Fund since its organization and were elected by the initial Stockholders of
the Fund. Mr. Schulte has served as a director of the Fund since October 21,
1987 when he was appointed to the Board to fill a vacancy created when the
Board, in accordance with the Fund's By-Laws, increased the number of directors
comprising the Board from three to four. Mr. Greenebaum was elected to the
Board of Directors at the 1988 Annual Meeting of Stockholders to fill a vacancy
created when the number of directors was increased from four to six. Mr.
Anderson, who has been President of the Fund since its organization, 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, in order to comply with the applicable provisions of
Section 15(f) of 1940 Act which require that at least 75% of the directors of
the Fund be disinterested directors for a period of three years following the
change in control.
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 1997. The other directors taken as a group
were either paid or had accrued directors' fees for 1997 from the Fund in the
aggregate amount of $40,000. For the period January 1, 1997 through June 30,
1997, they received an annual retainer of $4,000 plus a meeting fee of $1,000
for each regular Board meeting attended. Effective July 1, 1997, the annual
retainer was increased to $6,000 and the fee for each regular Board meeting
attended was increased to $1,500. The Fund expects the basis of such
compensation to continue during 1998. The Board of Directors held four
regularly scheduled meetings during the year ended December 31, 1997. All of
the directors attended every Board meeting.
On or about May 21, 1997, the occasion of the Fund's tenth
anniversary, on behalf of the Fund, the investment adviser purchased for each of
the Fund's four directors who are not "interested persons" of the Fund as that
term is defined in the 1940 Act 1,000 shares of the Fund's common stock. The
cost to the investment adviser was $9,175 for each director who is not an
"interested person", or a total of $36,700. Although these shares might be
deemed to represent additional compensation to those directors, the Fund did not
bear the cost of acquiring the shares.
The following table provides information concerning the compensation
of each of the Fund's directors for services
-5-
<PAGE>
rendered during the Fund's fiscal year ended December 31, 1997, exclusive of
shares of common stock purchased by the investment adviser for certain directors
as described above:
<TABLE>
<CAPTION>
COMPENSATION TABLE
PENSION OR TOTAL
AGGREGATE RETIREMENT BENEFITS ESTIMATED COMPENSATION
COMPENSATION ACCRUED AS PART OF ANNUAL BENEFITS FROM FUND
NAME OF PERSON FROM FUND FUND EXPENSES UPON RETIREMENT PAID TO DIRECTORS
- -------------- --------- ------------- --------------- -----------------
<S> <C> <C> <C> <C>
Robert J. Greenebaum $10,000 $-0- $-0- $10,000
Robert M. Inman $10,000 $-0- $-0- $10,000
Kenneth V. Penland $ -0- $-0- $-0- $ -0-
Richard C. Schulte $10,000 $-0- $-0- $10,000
Roberta M. Wilson $10,000 $-0- $-0- $10,000
</TABLE>
____________________
Drinker Biddle & Reath LLP, of which W. Bruce McConnel, III, Secretary
of the Fund, is a partner, received fees during the year ended December 31, 1997
for services rendered as the Fund's legal counsel.
The Fund has a standing Audit Committee of the Board composed of
Messrs. Inman, Greenebaum 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, discuss the Fund's accounting policies,
discuss any recommendation of the independent auditors with respect to the
Fund's management practices, 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 Committee by the Board of Directors. The Audit
Committee met one time in 1997, and all members of the Audit Committee were
present.
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
-6-
<PAGE>
requirements were satisfied during 1997, except that Messrs. Greenebaum, Penland
and Schulte, directors of the Fund, and Mr. Anderson and Ms. Schock, officers of
the Fund, did not file on a timely basis one report relating to one transaction.
In addition, Ms. Schock did not file on a timely basis one report which
concerned transactions which occurred in 1995. 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.
The Board of Directors recommends that Stockholders vote FOR the
election of Messrs. Anderson and Greenebaum as Class I directors to serve until
the Annual Meeting of Stockholders in the year 2001 and until the election and
qualification of their successors.
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Stockholders are asked to act upon a proposal to ratify the
appointment by the directors of Ernst & Young LLP as the Fund's independent
auditors for the fiscal year ending December 31, 1998.
For the fiscal year ended December 31, 1997, Ernst & Young LLP
performed both audit and non-audit services for the Fund. Services consisted of
audits of the Fund's financial statements and review and consultation in
connection with filings with the Securities and Exchange Commission. Related
services consisted of a review of the Fund's status under Subchapter M of the
Internal Revenue Code of 1986.
Representatives of Ernst & Young LLP are expected to be present at the
Meeting with the opportunity to make a statement, if they desire to do so, and
be able to respond to appropriate questions from Stockholders.
The Board of Directors recommends that Stockholders vote FOR the
ratification of Ernst & Young LLP as the Fund's independent auditors for its
fiscal year ending December 31, 1998.
3. APPROVAL OF CHANGES IN FUNDAMENTAL INVESTMENT POLICIES AND
LIMITATIONS.
-7-
<PAGE>
At a meeting of the Fund's Board of Directors on February 23, 1998,
the directors approved proposed changes to the Fund's fundamental investment
policies and limitations, including the elimination of certain fundamental
investment policies and the adoption of certain non-fundamental policies, and
recommended that such changes be submitted to the Fund's stockholders for
approval at the Annual Meeting of Stockholders on May 12, 1998. A "fundamental"
investment policy or limitation is one that may be changed only with the
approval of stockholders. The proposed revisions do not reflect a change in the
investment approach of the investment adviser and are not intended to change
significantly the Fund's investment operations. The primary purpose of the
proposed changes is to increase the Fund's flexibility by eliminating certain
fundamental policies, increasing the number of large-capitalization stocks
eligible for investment by the Fund, and permitting the limited use of financial
futures, short sales and borrowing for investment leverage.
Certain investment policies and limitations of the Fund are matters of
fundamental policy and may not be changed without the approval of its
shareholders. These proposed changes to the language of the Fund's Investment
Objectives and Policies are set forth below in Proposals 3-7.
A. PROPOSAL 3.
PROPOSED NEW
CURRENT INVESTMENT POLICY INVESTMENT POLICY
------------------------- -----------------
<TABLE>
<CAPTION>
<S> <C>
The Fund has a fundamental policy The Fund has a fundamental policy
that during normal conditions it that during normal conditions it will
will at all times have at least 75% at all times have at least 75% of its
of its total assets invested in total assets invested in equity
common stocks selected from among securities of large companies with
those issued by (a) the 300 largest, headquarters in the United States,
dividend-paying companies with such as those included in, or similar
headquarters in the United States as in size to those included in,
measured by the market value of Standard & Poors' 500 Composite Stock
publicly-traded common stock, or (b) Price Index. The Fund calculates
the 300 largest, dividend-paying this requirement by adding the market
companies with headquarters in the values of common stocks, securities
United convertible into common stocks and
rights and warrants to acquire common
</TABLE>
-8-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
States as measured by stocks to the net option premiums on
revenues. individual common stocks and the
notional principal of net futures
positions, and subtracting from that
total the market values of securities
sold short.
</TABLE>
Explanation of Proposed Change: The proposal would broaden
the number of large, domestic companies that are eligible for investment by the
Fund and eliminate the requirement that they pay current dividends. The
proposed amendment would not change the Fund's primary emphasis on a value
approach to investing in blue chip stocks. The new policy would continue to be a
fundamental policy.
B. PROPOSAL 4.
PROPOSED NEW
CURRENT INVESTMENT POLICY INVESTMENT POLICY
------------------------- -----------------
<TABLE>
<S> <C>
The Fund may not purchase securities The Fund does not intend to purchase
on margin. securities on margin, except that the
Fund may obtain such short-term
credits as are necessary for the
clearance of securities transactions,
and may make margin payments in
connection with futures contracts and
related options.
</TABLE>
Explanation of Proposed Change: The proposal would facilitate the
clearance of securities transactions. It would also permit margin payments for
options and futures contracts. The Fund intends to engage in such transactions
on a limited basis. The proposal would remove a fundamental policy and adopt a
non-fundamental policy, thus eliminating the requirement that further changes to
the policy be submitted to a shareholder vote.
C. PROPOSAL 5.
PROPOSED NEW
CURRENT INVESTMENT POLICY INVESTMENT POLICY
------------------------- -----------------
-9-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
The Fund may not sell securities The Fund may make short sales of
short. securities for purposes of hedging
securities held or to seek to enhance
the performance of the Fund. In a
short sale transaction, the Fund
borrows a security from a broker and
sells it with the expectation that it
will replace the security borrowed
from the broker by repurchasing the
same security at a lower price.
These transactions may result in
gains if a security's price declines,
but may result in losses if a
security's price does not decline in
price.
When the Fund engages in short sales,
unless the short sale is otherwise
"covered" in accordance with the
policies of the SEC, the Fund will be
required to maintain in a segregated
account an amount of liquid assets
equal to the difference between: (a)
the market value of the security sold
short as calculated on a daily basis
and (b) any cash or United States
Government securities required to be
deposited as collateral with the
broker in connection with the short
sale (not including the proceeds from
the short sale). In addition, until
the Fund replaces the borrowed
security, the Fund will maintain the
segregated account on a daily basis
at such a level that the amount
deposited in the account plus the
amount deposited with the broker as
collateral will equal the current
market value
</TABLE>
-10-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
of the security sold short. Short sale
transactions will be conducted so that
not more than 10% of the value of the
Fund's total assets at the time of
entering into the short sale (exclusive
of proceeds from short sales) will be,
when added together, (a) in deposits
collateralizing the obligation to
replace securities borrowed to effect
short sales, and (b) allocated to the
segregated account in connection with
short sales.
</TABLE>
Explanation of Proposed Change: The proposal would permit
the Fund more flexibility to manage risk through hedging securities owned and to
enhance performance by engaging in short sale transactions. The proposal would
eliminate a fundamental policy and adopt a non-fundamental policy. A
non-fundamental policy may be changed in the future by the Board of Directors
without requiring a shareholder vote.
D. PROPOSAL 6.
PROPOSED NEW
CURRENT INVESTMENT POLICIES INVESTMENT POLICY
--------------------------- -----------------
(a) The Fund may not purchase or sell (a) The Fund may not purchase or sell
commodities, commodity contracts or commodities, commodity contracts, or
futures. futures, except futures on financial
instruments.
PROPOSED NEW
CURRENT INVESTMENT POLICIES INVESTMENT POLICY
- --------------------------- -----------------
(b) The Fund may not purchase or sell (b) This restriction is eliminated.
any warrants, rights, options or
indices.
Explanation of Proposed Change: The proposal would permit the Fund
more flexibility to manage risk and portfolio volatility by engaging in
transactions in financial
-11-
<PAGE>
futures. The proposal would eliminate fundamental policies prohibiting the
purchase or sale of commodities, commodity contracts, futures, warrants, rights,
options or indices, thus eliminating the requirement that further changes to the
policies be submitted to shareholder vote. The proposed non-fundamental policies
would continue to prohibit the purchase of commodities, commodity contracts and
futures (except financial futures). A non-fundamental policy may be changed in
the future by the Board of Directors without requiring a shareholder vote. The
Fund intends to engage in such transactions on a limited basis.
-12-
<PAGE>
E. PROPOSAL 7.
PROPOSED NEW
CURRENT INVESTMENT POLICY INVESTMENT POLICY
------------------------- -----------------
<TABLE>
<S> <C>
The Fund may not issue senior The Fund may issue senior securities
securities or borrow money, except or borrow money from banks or other
for (i) temporary bank borrowings lenders in an amount not exceeding
(not in excess of 5% of the value of 15% of the value of its total assets
its total assets) for emergency or when the investment adviser believes that the
extraordinary purposes, (ii) such return from securities purchased with
short-term credits (not in excess of borrowed funds will be greater than
5% of the value of its total assets) the cost of the borrowing.
as are necessary for the clearance Otherwise, the Fund will not issue
of securities transactions, (iii) senior securities or borrow money
borrowings from banks and other except for (i) temporary bank
financial institutions, in an amount borrowings (not in excess of 5% of
not exceeding 10% of its total the value of its total assets), (ii)
assets and on an unsecured basis, to short-term credits (not in excess of
finance the repurchase of its 5% of the value of its total assets)
shares, and (iv) the borrowing of an as are necessary for the clearance of
amount approximately equal to the securities transactions, and (iii)
underwriting discount and borrowings from banks or other
organizational and offering expenses lenders to finance the repurchase of
with respect to its initial public its shares.
offering.
</TABLE>
Explanation of Proposed Change: The proposal would eliminate the
fundamental policy prohibiting most borrowings and approve the adoption of a
non-fundamental policy permitting borrowing to obtain investment leverage in
amounts up to 15% of the Fund's total assets and for certain other purposes. The
proposal would remove a fundamental policy, thus eliminating the requirement
that further changes to the policy be submitted to a shareholder vote. A
non-fundamental policy may be changed in the future by the Board of Directors
without requiring a shareholder vote.
F. 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
-13-
<PAGE>
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. Approval of Proposal 2 requires the affirmative vote of the
holders of a majority of the votes cast at the Meeting. Approval of Proposals 3-
7 requires the affirmative "vote of a majority of the outstanding voting
securities". The "vote of a majority of the outstanding voting securities" means
the vote, at the annual meeting of the security holders, (a) of 67% or more of
the voting securities present at such meeting, if the holders of more than 50%
of the outstanding voting securities are present or represented by proxy; or (b)
of more than 50% of the outstanding voting securities, whichever is less. Under
Maryland law, abstentions do not constitute a vote "for" or "against" a matter
and will be disregarded in determining the "votes cast" on an issue. 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 deemed to be abstentions.
An abstention will have no effect (i.e. will not be considered a vote "for" or
"against") with respect to Proposal 2 and will have the effect of a vote against
Proposals 3-7.
G. 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 __, 1998, and, if such occurs, any such notice must be
received by the Fund on or before April __, 1998.
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<PAGE>
ADDITIONAL INFORMATION
INVESTMENT ADVISER
Denver Investment Advisors LLC serves as investment adviser for the
Fund and is located at 1225 Seventeenth Street, 26th Floor, Denver, CO 80202.
ADMINISTRATOR
American Data Services, Inc. serves as administrator for the Fund and
is located at Hauppauge Corporate Center, 150 Motor Parkway, Suite 109,
Hauppauge, NY 11788.
MANAGEMENT
Information concerning the names, ages, positions with the Fund,
current affiliations, and principal occupations of the principal officers of the
Fund, other than Messrs. Penland and Anderson, is set out below. Information
concerning Messrs. Penland and Anderson is set forth on pages __ and __.
VARILYN K. SCHOCK, C.F.A.
Vice President of the Fund
Vice President and Member, Denver Investment Advisors LLC (since 1995); prior
thereto Vice President, Quantitative Strategies, Denver Investment Advisors,
Inc. (since 1991); Portfolio Manager, Westcore Blue Chip Fund and Westcore
Small-Cap Opportunity Fund (since 1991). Age 36.
W. BRUCE MCCONNEL, III
Secretary of the Fund
Partner of the law firm of Drinker Biddle & Reath LLP, Philadelphia,
Pennsylvania. Age 55.
JASPER R. FRONTZ, C.P.A.
Treasurer of the Fund
Director of Mutual Fund Administration, Denver Investment Advisors LLC (since
1997); prior thereto Fund Controller, ALPS Mutual Fund Services, Inc. (1995-
1997); Senior Accountant, Deloitte & Touche LLP (1991-1995); Treasurer,
Westcore Funds (since 1997); former Treasurer, New Frontiers Fund (ALPS Mutual
Fund Services, Inc.). Age 29.
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
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<PAGE>
successor is elected and qualified. Messrs. Penland, Anderson and McConnel have
served as officers of the Fund since its inception and were initially elected at
the organizational meeting of the Fund on February 4, 1987. Ms. Schock has
served as an officer of the Fund since November 13, 1991. Mr. Frontz has served
as an officer of the Fund since November 11, 1997.
SECURITY OWNERSHIP
The following table sets forth, as of January 1, 1998, beneficial
ownership of the Fund's shares by (1) each director and (2) all directors and
officers as a group:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
NAME BENEFICIALLY OWNED/1/ OF CLASS
- ------------------------ --------------------- ---------
<S> <C> <C>
Kenneth V. Penland 145,413/2/ 1%
Robert J. Greenebaum 12,748 *
Robert M. Inman 4,165 *
Richard C. Schulte 1,825/3/ *
Roberta M. Wilson 2,230/4/ *
Todger Anderson 66,882 *
All directors and
officers as a group 235,347 1.6%
- --------------------------
</TABLE>
/1/ Unless otherwise indicated the beneficial owner has sole voting and
investment power.
/2/ Including 41,125 shares held by Mr. Penland, 65,347 shares owned by
Mr. Penland's wife, 16,914 shares jointly owned by Mr. Penland and his
wife, and 22,027 shares owned by Mr. Penland's daughter.
/3/ These shares include 825 shares that are owned by Mr. Schulte's wife.
/4/ These shares are owned jointly by Ms. Wilson and her husband.
/*/ Less than 1%.
STOCKHOLDER PROPOSALS - 1999 ANNUAL MEETING
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<PAGE>
A Stockholder who intends to present a proposal which relates to a
proper subject for Stockholder action at the 1999 Annual Meeting of
Stockholders, and who wishes such proposal to be considered for inclusion in the
Fund's 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, 1998. Any such proposals, as well as any questions relating
thereto, should be directed to the Fund to the attention of its President.
April __, 1998
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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<PAGE>
FORM OF 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 12, 1998 AT 12:00 NOON (MOUNTAIN TIME) AT THE WESTIN TABOR CENTER, 1672
LAWRENCE STREET, DENVER, COLORADO.
The undersigned hereby appoints Louis J. Kahanek, Jr. and Steven G.
Wine, 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: Todger Anderson
Robert Greenebaum
____ FOR nominee listed above (except as marked to the contrary)
____ WITHHOLD AUTHORITY to vote for nominee listed
above
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THE NAME ON THE LINE PROVIDED BELOW.)
__________________________________
2. Proposal to ratify the selection of Ernst & Young LLP as
independent auditors for the Fund for its fiscal year ending
December 31, 1998.
____ FOR ____ AGAINST ____ ABSTAIN
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<PAGE>
3. Proposal to approve a change to the Fund's fundamental policies and
limitations regarding investment of 75% of its total assets in equity
securities of large domestic companies ("Proposal 3").
____ FOR ____ AGAINST ____ ABSTAIN
4. Proposal to approve the termination of the Fund's fundamental
policy which prohibits the purchase of securities on margin and the
adoption of a non-fundamental policy to permit the Fund to engage in
such transactions in certain limited circumstances ("Proposal 4").
____ FOR ____ AGAINST ____ ABSTAIN
5. Proposal to approve the termination of the Fund's fundamental
policy which prohibits short sales of securities and the adoption of a
non-fundamental policy to permit the Fund to engage in such
transactions in certain circumstances ("Proposal 5").
____ FOR ____ AGAINST ____ ABSTAIN
6. Proposal to approve the termination of the Fund's fundamental
policies which prohibit the purchase of commodities, commodity
contracts, futures, warrants, rights, options or indices and approve
the adoption of a non-fundamental policy that would prohibit the
purchase of commodities, commodity contracts or futures, except
financial futures. ("Proposal 6").
____ FOR ____ AGAINST ____ ABSTAIN
7. Proposal to approve the termination of the Fund's fundamental
policy prohibiting borrowing in most circumstances. ("Proposal 7").
____ FOR ____ AGAINST ____ ABSTAIN
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<PAGE>
8. 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, FOR THE APPOINTMENT OF AUDITORS
AND FOR PROPOSALS 3-7.
PLEASE SIGN, DATE AND RETURN PROMPTLY.
RECEIPT OF NOTICE OF ANNUAL MEETING AND
PROXY STATEMENT IS HEREBY ACKNOWLEDGED.
------------------------------
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.
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