<PAGE>
[BLUE CHIP VALUE FUND LOGO]
Semi-Annual
Report to Stockholders
June 30, 1999
<PAGE>
Dear Fellow Stockholders,
The second quarter of 1999 finally saw the market rotate from classic
large capitalization growth stocks with high P/E multiples toward more
cyclical/value-oriented stocks. The S&P/Barra Value Index significantly
outperformed the S&P/Barra Growth Index in the quarter, and this Value in-
dex finished the six months up 14.0% vs. Growth finishing up 11.0%.
The Blue Chip Value Fund's net asset value performed in line with the
S&P/Barra Value Index and well above the S&P 500 in the second quarter.
For the six months ended June 30, 1999, the Fund's net asset value pro-
vided total return of 7.0%. We are optimistic that the factors supporting
more favorable performance for value stocks remain in place for the second
half of 1999.
As we have stated in past letters, the performance of growth-oriented
stocks over the last several years resulted in very wide valuation dispar-
ities between growth and value stocks. During the second quarter, this
disparity began to reverse as the prospect of higher interest rates sug-
gested lower valuations for future earnings (growth). At the same time,
investors gained renewed confidence that our long economic expansion may
continue uninterrupted (or at least without a major slowdown). These fac-
tors, along with indications that Southeast Asia might be improving and
that Europe was poised to resume growth, contributed to the better perfor-
mance of value stocks.
Our methodology continues to focus on attractive valuations of companies
with solid, improving business fundamentals. The portfolio price-to-earn-
ings multiple of 20.3 is more than 15% below the S&P 500 multiple of 24.2.
The Fund's price-to-book value ratio is 4.2, nearly 18% lower than the S&P
500 ratio of 5.1. At the same time, the Fund's one year earnings per share
growth rate of 13.8% is 24% higher than the S&P 500 growth rate of 11.1%.
Despite the addition of some non-dividend paying stocks last year, the
portfolio dividend yield of 1.0% remains only slightly below the S&P 500
yield of 1.2%.
After some repositioning during the first quarter, the composition of the
Fund has remained substantially unchanged during the second quarter. Util-
ities produced relatively good returns during the first half. Technology
names such as IBM, Motorola, Adobe and Novell have all produced returns in
excess of 40% during the six months ended June 30. In addition, some capi-
tal goods names including Tyco International, Ingersoll Rand, and United
Technologies were up around 30%. While consumer staples generally experi-
enced choppy waters in the first quarter, the second quarter improved. Our
holdings in this sector were led by Allergan, up nearly 70% year to date.
Looking forward to the remainder of 1999, we believe large value stocks
should provide superior relative return opportunities. The interest rate
and inflation outlook appear to have stabilized for the time being. The
international situation, while always potentially volatile, seems brighter
with some closure brought to the Kosovo crisis and continued indications
that the worst may be over in Asia. While the prospect of Year 2000 dis-
ruptions to the economy and market continues to create uncertainty, no
strong reasons for concern in financial or international markets have
emerged with compelling evidence at this stage. Given the continued
strength of the domestic economy, we believe that investing in large-cap
US equities where valuations are attractive should remain a meaningful
part of investors' portfolios.
<PAGE>
We continue to position the Fund to participate in the rotation to value
stocks, while aiming to reduce investment risk. Thank you for continuing
to make the Blue Chip Value Fund part of your investment portfolio.
Sincerely,
Varilyn K. Schock, CFA Kenneth V. Penland, CFA
Vice President & Portfolio Manager Chairman of the Board
2nd Quarter 1999 Distribution Information
Blue Chip Value Fund, Inc. has declared a quarterly distribution of $.27
per share with a Record Date of July 16, 1999 and a Payable Date of July
30, 1999.
Of the total distribution, $.0164 represents net investment income,
$.1322 represents long-term capital gain and the remaining undesignated
portion is paid from capital surplus. If the Fund's total distributions
for the year (exclusive of long-term capital gains dividends) exceed its
net investment income and short-term capital gains for such year, a por-
tion of such undesignated distributions may constitute a non-taxable re-
turn of capital. The actual determination of the source of the undesig-
nated distributions can be made only at year end. All shareholders will
receive written notification regarding the components and tax treatment of
all distributions for the 1999 calendar year in early 2000.
If you have elected to receive your distribution in cash, the enclosed
check is in payment of such distribution. If you have elected to reinvest
your distribution, enclosed is your reinvestment confirmation.
<PAGE>
Year 2000 Update
Blue Chip Value Fund, Inc. ("Blue Chip") and its third-party service
providers are nearing completion in their preparations for the turn of the
century. Denver Investment Advisors LLC ("Denver Investment Advisors"),
Blue Chip's investment adviser, is primarily responsible for obtaining and
summarizing information about the activities of Blue Chip's third-party
service providers for consideration by Blue Chip's Board of Directors on a
quarterly basis.
Denver Investment Advisors uses many hardware and software vendors for
its Information Technology infrastructure as well as many other entities
to process securities and other financial transactions promptly and accu-
rately. Therefore, their ability to continue managing assets through the
Year 2000 depends on the ability of a large number of third-party vendors
and service providers to deliver Year 2000 compliant products and servic-
es. Denver Investment Advisors has obtained and evaluated information on
all of its "critical" systems and corresponding vendors. In addition to
the evaluation of the written correspondence provided by external vendors,
and other sources, Denver Investment Advisors has completed testing, where
feasible, on all "critical" systems and services with the assistance of
vendors and service providers to eliminate any unforeseen difficulties
specifically between the organizations.
Denver Investment Advisors' efforts to effectively prepare for the Year
2000 do not simply stop at the systems and operations of day to day busi-
ness. In order to be fully prepared for the turn of the century, Denver
Investment Advisors portfolio managers and analysts include Year 2000 com-
pliance issues among the many factors used in evaluating investments for
Blue Chip's portfolio.
Each of the other key third-party service providers, including Blue
Chip's fund accounting agent, transfer agent (shareholder recordkeeper)
and custodian, has prepared summaries of their Year 2000 compliance pro-
jects and the progress achieved. These summaries indicate, with respect to
mission critical systems, that each expected completion with their Year
2000 preparations and testing by June 30, 1999. The information about Year
2000 readiness of third parties summarized above was provided to Denver
Investment Advisors by these third parties and has not been independently
verified.
Blue Chip and its service providers are committed to achieving Year 2000
compliance on a timely basis. Each service provider is currently demon-strating
reasonable efforts to ensure that their business systems and services continue
to operate through the turn of the century without significant business
disruption. However, it is important to emphasize that given the host of
various interconnections and interdependencies, some well beyond the range of
control of a single entity, the efforts described above do not guarantee
complete Year 2000 compliance across all systems and operations.
This document constitutes Year 2000 readiness disclosure as defined in
the Year 2000 Information and Readiness Disclosure Act.
<PAGE>
BLUE CHIP VALUE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999 (Unaudited)
<TABLE>
<S> <C>
ASSETS
Investment in common stock at market value (identified cost--
$123,050,832).................................................. $175,109,353
Short-term investments........................................... 6,783,631
------------
TOTAL INVESTMENTS.............................................. 181,892,984
Receivable for securities sold................................... 2,385,562
Dividends receivable............................................. 153,881
Other assets..................................................... 38,548
------------
TOTAL ASSETS................................................... 184,470,975
============
LIABILITIES
Payable for securities purchased................................. 5,395,873
Advisory fee payable............................................. 83,318
Administration fee payable....................................... 9,397
Accrued expenses and other liabilities........................... 66,272
------------
TOTAL LIABILITIES.............................................. 5,554,860
------------
NET ASSETS....................................................... $178,916,115
============
COMPOSITION OF NET ASSETS
Capital stock, at par............................................ $ 167,395
Paid-in capital.................................................. 115,723,959
Undistributed net capital gains.................................. 10,678,351
Undistributed net investment income ............................. 287,889
Net unrealized appreciation on investments....................... 52,058,521
------------
$178,916,115
============
SHARES OF COMMON STOCK OUTSTANDING (100,000,000 shares authorized
at $0.01 par value)........................................... 16,739,526
============
Net asset value per share........................................ $ 10.69
============
</TABLE>
See accompanying notes.
<PAGE>
BLUE CHIP VALUE FUND, INC.
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1999 (Unaudited)
<TABLE>
<S> <C> <C>
NET INVESTMENT INCOME
INCOME
Dividends............................................. $1,010,857
----------
TOTAL INCOME.......................................... $ 1,010,857
-----------
EXPENSES
Investment advisory fee (Note 3)...................... 499,663
Administrative services fee (Note 3).................. 57,998
Shareholder reporting................................. 40,207
Transfer agent fees................................... 40,264
Legal fees............................................ 26,496
Directors' fees....................................... 22,859
Insurance and fidelity bond........................... 15,915
Audit fees............................................ 13,726
Custodian fees........................................ 4,760
Other................................................. 13,993
----------
TOTAL EXPENSES........................................ 735,881
-----------
NET INVESTMENT INCOME................................. 274,976
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments....................... 8,465,505
Change in unrealized appreciation of investments....... 2,728,748
-----------
NET GAIN ON INVESTMENTS............................... 11,194,253
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.. $11,469,229
===========
</TABLE>
See accompanying notes.
<PAGE>
BLUE CHIP VALUE FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the
Six Months For the
Ended Year ended
June 30, December 31,
1999 (1) 1998
------------ ------------
<S> <C> <C>
Increase in net assets from operations:
Net investment income............................ $ 274,976 $ 854,134
Net realized gain from securities transactions... 8,465,505 22,664,465
Net change in unrealized appreciation of
investments ................................... 2,728,748 5,341,824
------------ ------------
NET INCREASE IN NET ASSETS FROM OPERATIONS........ 11,469,229 28,860,423
------------ ------------
Distributions to shareholders from:
Net investment income............................ 0 (841,221)
Net realized gain on investments................. (4,184,881) (16,892,471)
------------ ------------
(4,184,881) (17,733,692)
Increase in net assets from common stock
transactions:
Proceeds from the sale of 0 and 2,035,723 shares
respectively, net of offering expenses.......... 0 16,774,380
Net asset value of common stock issued to
shareholders from reinvestment of dividends
(11,699 shares issued for the six months ended
June 30, 1999, 460,246 shares issued for the
year ended December 31, 1998) 119,915 4,705,335
------------ ------------
119,915 21,479,715
------------ ------------
NET INCREASE IN NET ASSETS........................ 7,404,263 32,606,446
NET ASSETS
Beginning of period.............................. 171,511,852 138,905,406
------------ ------------
End of period ($287,889 and $12,913 undistributed
net investment income at June 30, 1999 and
December 31, 1998, respectively)............... $178,916,115 $171,511,852
============ ============
</TABLE>
See accompanying notes.
(1) Unaudited
<PAGE>
BLUE CHIP VALUE FUND, INC. FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the
six months
ended For the year ended December 31,
June 30, ------------------------------------
1999 (1) 1998 1997 1996 1995
--------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Per Share Data (for a share
outstanding throughout each
period)
Net asset value-beginning
of period.......................... $ 10.25 $ 9.76 $ 8.94 $ 8.47 $ 6.98
Investment operations
Net investment income................ 0.02 0.05 0.10 0.13 0.13
Net gain (loss) on
investments........................ 0.67 1.62 2.56 1.69 2.45
-------- -------- -------- ------- -------
Total from investment
operations......................... 0.69 1.67 2.66 1.82 2.58
-------- -------- -------- ------- -------
Distributions
From net investment
income............................. -- (0.05) (0.10) (0.13) (0.13)
From net realized gains on
investments........................ (0.25) (1.08) (1.47) (1.22) (0.95)
Tax return of capital................ -- -- -- -- (0.01)
-------- -------- -------- ------- -------
Total distributions.................. (0.25) (1.13) (1.57) (1.35) (1.09)
-------- -------- -------- ------- -------
Capital Share Transactions
Dilutive effect of rights
offering........................... -- (0.04) (0.26) -- --
Offering costs charged to
paid in capital.................... -- (0.01) (0.01) -- --
-------- -------- -------- ------- -------
Total capital share
transactions....................... -- (0.05) (0.27) -- --
-------- -------- -------- ------- -------
Net asset value, end of
period............................ $ 10.69 $ 10.25 $ 9.76 $ 8.94 $ 8.47
======== ======== ======== ======= =======
Per share market value,
end of period..................... $ 10.125 $ 9.75 $10.9375 $ 9.25 $ 7.625
======== ======== ======== ======= =======
Total investment return based
on: (a)
Market Value......................... 6.5% 1.3% 40.5% 39.5% 41.6%
Net Asset Value...................... 7.0% 17.6% 31.2% 21.3% 38.1%
Ratios/Supplemental data:
Ratio of expenses to
average net assets................. 0.87%* 0.94% 0.94% 1.05% 1.15%
Ratio of net investment
income to average net
assets............................. 0.32%* 0.56% 1.01% 1.39% 1.55%
Ratio of distributions to
average net assets................. 4.92%* 11.62% 16.48% 14.42% 13.22%
Portfolio turnover rate
(b)................................ 23.76% 76.02% 55.15% 42.31% 50.84%
Net assets-end of period
(in thousands)..................... $178,916 $171,512 $138,905 $98,041 $92,887
</TABLE>
See accompanying notes.
* Annualized.
(1) Unaudited.
(a) Total investment return is calculated assuming a purchase of
common stock on the opening of the first day and a sale on the
closing of the last day of each period reported. Dividends and
distributions, if any, are assumed for purposes of this calcu-
lation to be reinvested at prices obtained under the Fund's
dividend reinvestment plan. Rights offerings, if any, are as-
sumed for purposes of this calculation to be fully subscribed
under the terms of the rights offering. Generally, total in-
vestment return based on net asset value will be higher than
total investment return based on market value in periods where
there is an increase in the discount or a decrease in the pre-
mium of the market value to the net asset value from the begin-
ning to the end of such periods. Conversely, total investment
return based on the net asset value will be lower than total
investment return based on market value in periods where there
is a decrease in the discount or an increase in the premium of
the market value to the net asset value from the beginning to
the end of such periods.
(b) A portfolio turnover rate is the percentage computed by taking the lesser
of purchases or sales of portfolio securities (excluding short-term invest-
ments) for the period and dividing it by the monthly average of the market
value of the portfolio securities during the period.
<PAGE>
BLUE CHIP VALUE FUND, INC.
June 30, 1999
<TABLE>
<CAPTION>
Market
Shares Cost Value
------- ------------ ------------
<S> <C> <C> <C>
COMMON STOCKS -- 97.87%
CAPITAL GOODS -- 28.21%
Aerospace & Defense -- 4.32%
General Dynamics Corp. ......... 48,900 $ 2,535,998 $ 3,349,650
United Technologies Corp........ 61,120 2,153,229 4,381,540
------------ ------------
4,689,227 7,731,190
Communication Equipment - 3.36%
Motorola, Inc. ................. 63,400 3,903,059 6,007,150
Computers (Hardware) -- 5.24%
Apple Computer Inc.* ... 56,300 2,134,166 2,607,394
International Business Machines
Corp. ....................... 52,400 3,583,375 6,772,700
------------ ------------
5,717,541 9,380,094
Computer Software & Services -- 8.67%
Adobe Systems Inc. ............. 41,800 1,936,015 3,434,131
Novell Inc.*.................... 217,600 3,149,642 5,766,400
UniSys Corp.*................... 161,900 2,631,089 6,303,981
------------ ------------
7,716,746 15,504,512
Machinery -- Diversified -- 2.96%
Ingersoll-Rand Co. ............. 82,000 3,458,861 5,299,250
Manufacturing -- Diversified -- 3.66%
Tyco International Ltd. ........ 69,200 4,159,610 6,556,700
------------ ------------
Total capital goods............. 29,645,044 50,478,896
------------ ------------
CONSUMER CYCLICAL -- 15.15%
Automobiles -- 1.72%
General Motors Corp. ........... 46,700 3,329,640 3,082,200
Auto Parts & Equipment -- 0.34%
Delphi Automotive Systems....... 32,640 661,920 605,880
Entertainment -- 4.77%
Carnival Corp. ................. 124,920 2,456,738 6,058,620
Viacom Inc. -- Class B*......... 56,000 2,562,532 2,464,000
------------ ------------
5,019,270 8,522,620
</TABLE>
<PAGE>
SCHEDULE OF INVESTMENTS
(Unaudited)
<TABLE>
<CAPTION>
Market
Shares Cost Value
------- ------------ ------------
<S> <C> <C> <C>
Leisure -- 2.26%
Harley-Davidson Inc. ........................ 74,400 $2,701,526 $4,045,500
Retail Stores -- General Merchandise Chains -- 5.01%
Dayton-Hudson Corp. ......................... 77,200 2,509,915 5,018,000
Kmart Corp.*................................. 240,300 3,477,746 3,949,931
------------ ------------
5,987,661 8,967,931
Retail Stores -- Specialty Apparel - 1.05%
Intimate Brands Inc. - Class A............... 39,690 1,723,226 1,880,314
------------ ------------
Total consumer cyclical...................... 19,423,243 27,104,445
------------ ------------
CONSUMER STAPLES -- 14.42%
Distributors (Food & Health) -- 1.82%
SuperValu Inc ............................... 126,600 2,283,995 3,252,038
Drugs (Major Pharmaceuticals) -- 2.75%
Schering-Plough Corp. ....................... 92,760 1,701,501 4,916,280
Healthcare-Diversified -- 4.25%
Allergan Inc. ............................... 19,300 1,028,534 2,142,300
Bristol-Myers Squibb Co. .................... 77,480 2,098,931 5,457,498
------------ ------------
3,127,465 7,599,798
Retail Stores -- Drug Stores -- 2.02%
CVS Corp. ................................... 70,800 1,986,225 3,619,650
Retail Stores -- Food -- 3.58%
Albertson's Inc. ............................ 46,998 2,589,257 2,423,334
Kroger Co.*.................................. 142,600 3,662,188 3,983,888
------------ ------------
6,251,445 6,407,222
------------ ------------
Total consumer staples....................... 15,350,631 25,794,988
------------ ------------
CREDIT SENSITIVE -- 31.14%
Banks (Money Center) -- 2.07%
J.P. Morgan & Co. Inc. ...................... 26,300 3,609,933 3,695,150
Consumer Finance -- 1.31%
Household International Inc. ................ 49,500 1,976,244 2,345,063
</TABLE>
<PAGE>
BLUE CHIP VALUE FUND, INC.
June 30, 1999
<TABLE>
<CAPTION>
Market
Shares Cost Value
------- ------------ ------------
<S> <C> <C> <C>
Electric Companies -- 4.09%
DTE Energy Co. ............................... 46,700 $1,965,344 $1,868,000
Edison International.......................... 71,530 1,701,968 1,913,427
GPU Inc. ..................................... 83,770 2,672,516 3,534,047
------------ ------------
6,339,828 7,315,474
Financial-Diversified -- 2.75%
CIT Group Inc. -- Class A..................... 48,400 1,512,785 1,397,550
Morgan Stanley Dean Witter & Co. ............. 34,400 2,954,467 3,526,000
------------ ------------
4,467,252 4,923,550
Insurance -- 2.59%
Equitable Companies Inc. ..................... 69,200 4,505,402 4,636,400
Investment Banking/Brokerage -- 2.72%
Goldman Sachs Group Inc. ..................... 19,800 1,049,400 1,430,550
Lehman Brothers Holdings Inc. ................ 55,200 3,011,498 3,436,200
------------ ------------
4,060,898 4,866,750
Savings & Loan -- 2.35%
Golden West Financial Corp. .................. 42,900 3,717,965 4,204,200
Telecommunications -- Long Distance -- 5.74%
AT&T Corp. ................................... 76,200 3,800,861 4,252,913
Sprint Corp. (FON Group)...................... 114,000 2,352,402 6,020,625
------------ ------------
6,153,263 10,273,538
Telephone -- 7.52%
Adelphia Communications -- Class A............ 33,600 2,074,800 2,137,800
ALLTEL Corp. ................................. 90,600 4,139,415 6,477,900
BellSouth Corp. .............................. 103,300 3,785,993 4,842,188
------------ ------------
10,000,208 13,457,888
------------ ------------
Total credit sensitive........................ 44,830,993 55,718,013
------------ ------------
</TABLE>
<PAGE>
SCHEDULE OF INVESTMENTS
(Unaudited)
<TABLE>
<CAPTION>
Market
Shares Cost Value
------- ------------ ------------
<S> <C> <C> <C>
INTERMEDIATE GOODS & SERVICES -- 8.95%
Containers (Metal & Glass) -- 1.59%
Ball Corp. .................................. 67,200 $3,003,354 $2,839,200
Oil (Integrated -- Domestic) -- 1.00%
Phillips Petroleum Co. ...................... 35,400 1,785,941 1,781,062
Railroads -- 1.02%
Union Pacific Corp. ......................... 31,400 1,684,434 1,831,012
Service (Comm'l & Consumer) -- 3.28%
Dun & Bradstreet Corp. ...................... 48,200 1,468,094 1,708,087
Hertz Corp. -- Class A....................... 67,200 2,661,041 4,166,400
------------ ------------
4,129,135 5,874,487
Waste Management -- 2.06%
Waste Management Inc. ....................... 68,600 3,198,057 3,687,250
------------ ------------
Total intermediate goods & services.......... 13,800,921 16,013,011
------------ ------------
Total common stocks.......................... 123,050,832 175,109,353
------------ ------------
SHORT-TERM INVESTMENTS -- 3.79%
Dreyfus Cash Management Fund................. 6,783,631 6,783,631
------------ ------------
Total investments -- 101.66% $129,834,462 181,892,984
============
Liabilities in excess of Cash and Other
Assets -- (1.66%) (2,976,869)
------------
NET ASSETS -- 100.00%........................ $178,916,115
============
</TABLE>
See accompanying notes
* Denotes non-income producing security.
<PAGE>
BLUE CHIP VALUE FUND, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1999 (Unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Blue Chip Value Fund, Inc. (the "Fund") is registered under the Investment Com-
pany Act of 1940, as amended, as a diversified, closed-end management invest-
ment company.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities Valuations--Each investment security is valued at the last sale
price at period end reported by the principal exchange on which the issue was
traded or, if no sale is reported, the last bid price is used. Short-term in-
vestments are valued at cost, which approximates market value.
Federal Income Taxes--The Fund intends to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment companies and
to distribute all of its taxable income to its stockholders. Therefore, no pro-
vision has been made for federal income taxes.
Investment Transactions--Investment transactions are accounted for on the trade
date. Realized gains and losses on investments are determined on the first-in,
first-out basis for both financial statement and federal income tax purposes.
Dividend income is recognized on the ex-dividend date.
Distributions to Stockholders--Distributions to stockholders are recorded on
the ex-dividend date. Distributions are classified to conform to the tax re-
porting requirements of the Internal Revenue Code. Distributions attributable
to current period realized gains from securities transactions which are offset
by the existence of loss carryovers from prior years are taxable to the recipi-
ent as ordinary income and reported as distributions in excess of realized
gains. Tax returns of capital represent distributions in excess of current and
accumulated earnings and profits are nontaxable to the recipient.
The fund distributes at least 2.5% of its net asset value quarterly to its
stockholders.
Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and disclosures made in the accompanying notes to the financial statements. Ac-
tual results could differ from those estimates.
2. PURCHASE AND SALE OF INVESTMENTS
The cost of investment securities purchased and proceeds from sales of securi-
ties (excluding short-term investments) aggregated $40,748,434
<PAGE>
and $52,219,178, respectively, for the period. At June 30, 1999, gross
unrealized appreciation of investments was $53,008,067 and gross unrealized de-
preciation of investments was $949,546.
3. INVESTMENT ADVISORY AND ADMINISTRATION SERVICES
The Fund has an Investment Advisory Agreement with Denver Investment Advisors
LLC (the "Advisor"), whereby a management fee is paid to the Advisor based on
an annual rate of .65% of the Fund's average weekly net assets up to
$100,000,000 and .50% of the Fund's average weekly net assets in excess of
$100,000,000. The management fee is paid monthly based on the average of the
net assets of the Fund computed as of the last business day of the New York
Stock Exchange is open each week. Certain officers and directors of the Fund
are also officers of the Advisor.
The Fund has an Administrative Agreement with American Data Services, Inc. The
administrative service fee is based on an annual rate of .10% of the Fund's av-
erage weekly net assets up to $75,000,000, .05% of the Fund's average weekly
net assets between $75,000,000 and $125,000,000, and .03% of the Fund's average
weekly net assets in excess of $125,000,000, with a $7,463 per month minimum.
The administrative services fee is paid monthly based on the average of the net
assets of the Fund computed as of the last business day the New York Stock Ex-
change is open each week.
4. ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of the Fund (the "Annual Meeting") was held
on May 13, 1999 pursuant to notice given to all stockholders of record at the
close of business on March 25, 1999. At the Annual Meeting, stockholders were
asked to approve the following:
Proposal 1.
To elect two Class II directors, Robert M. Inman and Richard C. Schulte, to
serve until the Annual Meeting in the year 2002. The number of shares voting
for the election of Mr. Inman was 14,709,224 and the number of shares withhold-
ing authority was 225,349. The number of shares voting for the election of Mr.
Schulte was 14,708,469 and the number of shares withholding authority was
226,104.
The name of each other director whose term of office continued after the Annual
Meeting was Todger Anderson, Robert J. Greenebaum, Kenneth V. Penland and
Roberta M. Wilson.
Proposal 2.
To ratify the appointment by the Board of Directors of Ernst & Young LLP as the
Fund's independent auditors for the fiscal year ended December 31, 1999. The
number of shares voting for ratification of the appointment of Ernst & Young
LLP as independent auditors was 14,714,752, the number of shares voting against
ratification was 103,231 and the number of shares abstaining was 116,590.
<PAGE>
BOARD OF DIRECTORS
Kenneth V. Penland, Chairman
Todger Anderson, Director
Robert J. Greenebaum, Director
Robert M. Inman, Director
Richard C. Schulte, Director
Roberta M. Wilson, Director
OFFICERS
Kenneth V. Penland, Chairman
Todger Anderson, President
Varilyn K. Schock, Vice President
W. Bruce McConnel, III, Secretary
Jasper R. Frontz, Treasurer
Investment Advisor
Denver Investment Advisors LLC
1225 17th Street, 26th Floor
Denver, CO 80202
(303) 312-5100
Shareholder Relations
Margaret R. Jurado
(800) 624-4190 (303) 312-5100
e-mail: [email protected]
Custodian
Bank of New York
48 Wall Street
New York, NY 10286
Fund Administrator
American Data Services, Inc.
Hauppauge Corporate Center
150 Motor Parkway, Suite 109
Hauppauge, NY 11788
Transfer Agent Dividend Reinvestment Plan Agent
(Questions regarding your Account)
ChaseMellon Shareholder Services, L.L.C.
Overpeck Centre
85 Challenger Road
Ridgefield Park, NJ 07660
(800) 288-9541
www.chasemellon.com
NYSE Symbol--BLU
[BLUE CHIP VALUE FUND LOGO]
www.blu.com
